Onni to liquidate 375 condo units
Over the last week or two on this site readers A1 and Macchiato have posted rumors that a local developer was getting ready to announce big price cuts to clear out unsold condo units.. According to the CBC it looks like those rumors may be coming true. Developer Onni has 375 condo’s that aren’t selling and the CBC is reporting that they will be liquidating these units in a ‘dutch auction’, which could potentially set a new low price point for the thousands of condo units still to be completed over the next couple of years.
The CBC is reporting that Onni will be holding a media event on Thursday to announce details. If you find a link to more information on this story, please post it in the comments section.
update: Lilypad posted a link to this PDF advertising the sale, it does not appear to be a ‘dutch auction’ as CBC radio reported, but the PDF does not include a lot of detail. It does include the following as part of a FAQ:
Is it auction??
No. It is a bulk purchase. There is no extra contract work of any kind required.What are the homes being discounted??
Aggressive speculators lined up overnight at launches to scoop up prime units and then could not flip them before completion. Many could not afford to complete and lost 15% deposits. Much of the available inventory is made up of these homes. They are 375 completed, fully warranted, brand new, never occupied homes featuring the latest finishings and amenities.Where??
Spread over seven projects located across the Lower Mainland.
They also include the following comments on prices:
How inexpensive will they be??
These homes will sell under assessed values, current comparables and independent market appraisals at prices that get buyers very, very excited.Why is the developer selling for such low prices??
These homes are standing inventory and costing the developer strata fees, property taxes, capital carrying cost and other costs. Also, many of these homes have been partially paid for by the abandoned deposits of speculators.
January 25th, 2009 at 2:18 am
re: Liquidation sale by Onni upto 40% on pre-sale price:
I went to Onni's surrey location, Escada to see if I could buy a condo. First few days they showed different condos saying all of them were 25% off. They quoted the price $289,900 less 25% for a condo I liked. When I went to sign the sale offer contract, they increased the price to 334,000 for the same condo. After a brief discussion they agreed to give me 35% off to bring the discounted price to what was quoted a day ago. The Onni sales rep prepared the sale contract and I signed it. After 2 days I was told the "vendor", Onni has increased the price again. Now I was told to make a counter offer, $30,000 more than that was quoted, agreed and put on the original sale contract by their own rep. After being through this and reading all the quotes, I am glad I can make a better decision by not buying from Onni.
January 19th, 2009 at 9:22 am
scary thing is we are entering a depression…
Irving Fisher argued that the predominant factor leading to the Great Depression was over indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubble. He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows:
1. Debt liquidation and distress selling (check)
2. Contraction of the money supply as bank loans are paid off (check)
3. A fall in the level of asset prices (check)
4. A still greater fall in the net worth of business, precipitating bankruptcies (check)
5. A fall in profits (check)
6. A reduction in output, in trade and in employment. (check)
7. Pessimism and loss of confidence (check)
8. Hoarding of money (check)
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates. (check)
I personally think what will happen is that we will see the US try to bail out JP Morgan and when that happens they will nationalize all the banks… why the US will have to bail out JP Morgan – CDS/ derivatives (in the tune of 24+ trillion). JP Morgan will not be able to guarantee all of the contracts so the Fed will say that they will guarantee JP Morgan’s derivatives. What will happen as a result………. 1. China and the rest of the countries holding US debt will ask them to pay up 2. US of course will not be able to pay 3. devaluation of the US dollar and hyperinflation in the US
It’s no longer a liquidity or consumer confidence what it is and what they are not telling everyone is the leverages and the failure of banks throughout the world… I hope they are wrong but signs are pointing to that and the simple fact is that the US gov’t and their citizens are BROKE. Subprime (check) à credit cards (happening ) à Alt A (later this year) à finally the trillion dollars CDS / derivative market
January 16th, 2009 at 2:08 pm
RCMP embroiled in family feud over Whistler condo
Arrested, handcuffed in front of own unit.
Susan Lazaruk, The Province
Published: Wednesday, June 06, 2007
A Vancouver businessman is suing the RCMP after officers arrested and handcuffed him, his son and a business associate while sitting in his Hummer outside his Whistler condo.
Donato De Cotiis is seeking damages for "battery, false imprisonment, assault, excessive use of force and carrying out their duties in a grossly negligent manner."
"Apart from the physical pain and injury that he sustained, the actions by the RCMP and its officers has held him up to ridicule and damaged his reputation while he was entertaining an important business connection," his B.C. Supreme Court writ said in reference to his guest, Robert Kanaat, a "successful American businessman in the computer industry who had sold his company to Microsoft."
The allegations stem from a long-standing family feud between De Cotiis and his mother and siblings, part of which involves the ownership of a Whistler condo, Unit 11, in a complex built by Donato's father, Marcangelo, the late head of a family that owns Onni Group, Pinnacle International and Amacon.
The day after Marcangelo died on Jan. 30, 2007, his widow, Addolorata De Cotiis, and daughter Lilliana Hughes and Kevin Hughes moved into Unit 11 and changed the locks, according to the writ.
Three days later, on Feb. 3, De Cotiis and his son, Michael, 17, and Kanaat went to Whistler to spend the weekend at De Cotiis's townhouse in the same complex, Unit 6.
When De Cotiis was about to call a locksmith because he had brought the wrong key, an RCMP officer ordered him out of his Hummer and on to his knees with his hands behind his head. The officer pointed a gun at his head, the writ said.
The officer told him to shut up when he explained it was his unit. They were handcuffed and taken to the station.
The officers said they were acting on a complaint from No. 11 and refused to make a phone call to verify De Cotiis's story, the writ said. They were later released.
slazaruk@png.canwest.com
January 16th, 2009 at 10:53 am
Confessions of an Onni site superintendent …
I did indeed briefly work for the De Cotiss Onni brothers grim. I quit after 2 weeks. (they shorted my cheque too)
There are at very least two major flaws (of many) with the building and business practices of the De Cotiss clan.
1. What the engineer and drawings say is irrelevant to what actually gets built. We poured a very large slab and the design called for 6 inches of concrete. In the end that slab was less than 4 inches thick. Savings for the multi-millionaires? Probably close to 6 figures. There was a major crack in the foundation and the engineer required a relatively simple structural fix. The crack was patched and hidden and remains to this day.
2. The De Cotiss do not pay their tradesmen for completion of work to standard. Their strategy is to owe as much as humanly possible. Naurally they go through tradesmen like water and the quality is uniformly horrid. In 2 weeks I saw more than one honest tradesmen screwed over totally, and they were the ones that did quality work.
January 16th, 2009 at 9:44 am
Of course on the other hand the taxpayer sponsored luxury condos at Millennieum Water are being built for $ 800 per foot.
Just goes to show how much taxpayers will get screwed on THAT deal. Almost certainly $ 300 million down the freakin tubes and thats assuming things in the condo market won't get any worse.
January 16th, 2009 at 9:30 am
So the De Cotiss braintrust have a 40% off sale when the current value is probably half the original asking price and dropping like a rock, every month?
$ 400 a foot for a shoebox in Richmond doesn't sound like much of a deal to get excited about, particulalry with the De Cotiss reputation for quality. People should wait beyond March 7 to roll the bones on an overpriced condo … I believe there will be more than one desperately broke developer willing to sell at virtually any price and soon enough.
January 16th, 2009 at 3:15 am
whoa..something stinks in vancouver..
<a href='http://www.calgaryherald.com/Sports/Vancouver+official+resigns+wake+Olympic+woes/1182305/story.html' title='' rel="nofollow">Vancouver official resigns in wake of Olympic woes
January 15th, 2009 at 11:38 pm
Onni teamed up with Mac because they were receiving bad press lately, leaving many buyers unhappy with the quality and service. Once they get your money they don't care about you anymore. So they are using Macs name to help them sell.
Be careful and really do your research when buying a condo. If you don't trust me just visit a site and look at a vacant suite and look at the quality. You'll see what I'm talking about.
January 15th, 2009 at 11:34 pm
I'm renting at Suter Brook Village and I heard that Room Living has been leaking on the 7th floor. Also the underground parking in Aria is leaking water in several areas. Definitely do NOT buy or you'll be sorry. I have a friend who worked at the site and said quality isn't the greatest.
Onni's prices reflect 2007 with a 25-40% discount on top of that. So in realty you aren't getting the deal they say you are.
Buyers be very careful, it may be worth while to wait and see prices drop further.
January 15th, 2009 at 10:21 pm
real state crak:
For sure, and I feel sad for them. Still if they plan to live in this (overpriced) units for several years, assuming that they're lucky enough to meet the payments, they will be somehow better than those flippers that borrowed money from their equity and are now risking to lose everything.
Regarding the purchase or a home in the current situation I agree that it is a very difficult decision but I don't dare to call anyone stupid for doing it.
Right now the future does not look very promising for most of us, but if we look at our own families a couple of generations before we may find that they lived through tougher times that ourselves and not only survived but gave us the opportunity to be in this planet, with all its glory and doom.
January 15th, 2009 at 10:17 pm
onni owner:
Ever thought about why you don't have any money?
January 15th, 2009 at 10:12 pm
Millennium Under Water is so boring next to this freak show. March 7 is going to be fun to watch; any hypothetical buyers will earn every bit of pain they get out of the deal. The key word being hypothetical, of course. Who would be crazy enough to buy?
Speaking of accidents you can't peel your eyes away from, when is Woodwards going to complete? Google gives me dates between Sept 2008 and Dec 2009. That's going to be a disaster – looking for the completion date I found a one bedroom for sale at $650/sf. Granite and stainless, no doubt. I guess that makes it worthwhile, right?
January 15th, 2009 at 10:02 pm
MickeyFinn:
"And we all know that when markets correct, they typically over shoot the mean. "
That is the key point of interest to me. I have a "nasty" feeling that the overshoot will be dramatic. How dramatic? Could we see those Vancouver shacks on Oak that were selling for 1,000,000 suddenly go for 18,000? In Detroit nicer houses go for 1$…
"My prediction is that Onni will sell very little if any product on March 7th."
I am with you on that one, but we still win, as that sets the new prices for January. Did we say "Spring from Hell 2009" yet in this thread?
Regards
arit
January 15th, 2009 at 9:54 pm
TUT:
wouldn't you feel stupid if you bought recently? wouldn't you feel stupid if you buy now knowing that the market is in free fall.
January 15th, 2009 at 9:48 pm
I've been this morning at Sutter Brook (Port Mody) ans seen several units al Libra (Low rises). The price reduction is exactly 100$ less per square foot. The unist was originally $419,000 and has 960n sqft, thus 436$ per sqft, no reduced to 336$ sets the price at $323,000, or 27% less. This is only an example and, possibly, cannot be generalized but it fits with the initial statement made by Onni of reducing 20% to 40%.
My two cents.
January 15th, 2009 at 9:44 pm
I would have liked to have been a fly on the wall in the meeting room when the owners and management of Onni Developments were discussing the risks and rewards associated with holding a fire sale of their unsold inventory. You know of course that they had to address the question of whether this was tantamount to soiling their own bed. After all, they were essentially making a decision to announce that they've screwed-up and that they have more inventory than they know what to do with… in a falling market (ouch). Worse yet, they must have discussed the fact that every other developer in the Province would now hate them.
Before this move by Onni, the Vancouver area real estate developers were living by an unspoken code. The most important unspoken code when the proverbial shite hits the fan: that code is "Nobody moves and nobody gets hurt." But Onni moved. In fact, you could say that Onni flinched. And now every developer is going to hurt.
And I love how Onni is trying to blame their 375 unit inventory problem on "speculators who cannot complete on their purchases." Guess what, the speculators cannot close on their purchases because they are unable to get financing from any bank in order to close… and the Canadian banks' concern comes from the simple fact that the condo units are over-valued and therefore the loan-to-value ratios are out of whack. The banks are wise to the extent of the bubble.
If the banks won't finance then every buyer is going to get hurt. In other words, it won't be just speculators that cannot close on their foolish purchasers. The same is going to happen to some people who intended to live in their condos.
The house of cards is starting to fall. Nothing is going to stop it now.
And we all know that when markets correct, they typically over shoot the mean. In other words, Vancouver's real estate is not going to fall to a level where it magically meets economic balance (I.e. where prices are justified by attainable net rents). No, in fact the price of Vancouver real estate will likely fall well below the mean.
My prediction is that Onni will sell very little if any product on March 7th.
Remain patient boys and girls… the party has just begun. Patience will be rewarded handsomely.
January 15th, 2009 at 9:22 pm
Vansanity:
the result is this
"Add it all up, and economists believe unemployment is set to jump dramatically over the next two years, and no province or industry is immune. TD Economics estimates 251,000 jobs will be lost over the next nine months."
VERY BAD NEWS
January 15th, 2009 at 9:16 pm
Hopefully the delusional can understand this: Credit has tightened. Capice? "What does that mean, angry blogger?" It means that the party is OVER!
Picture the amount of debt (money) floating around, reduced after the banks (money creators aka lenders) realized that the debts were unable to be paid, ala the bubble they created had burst. Credit tightened.
Remember all those hundreds of billions of write-downs and losses last year around the globe? What did you think the impact would be after the amount of money floating through the system shrank?
Here's a hint: Picture the exact opposite of the last decade.
People are not delusional, they are f**king stupid!
January 15th, 2009 at 8:54 pm
http://blog.macleans.ca/2009/01/08/the-employment…