Vancouver Condo Info

There’s a strange thing happening in the Vancouver real estate market right now. Even as some rush to buy while interest rates are at rock bottom, others are trying to figure out how to get out of a presales purchase agreement they may have rushed into.

At least one local law firm is marketing themselves as condo presales litigation specialists.  Harper Grey represents clients that are being sued or fear being sued by a developer. From their site:

Harper Grey LLP represents individuals and groups of pre-sale purchasers who signed contracts for major lower mainland condo projects including:

33 Pender – Vancouver
Aria 2 – Port Moody
Aura Townhomes – Surrey
Axis – Burnaby
Cosmo – Vancouver
Donovan – Vancouver
Espana – Vancouver
Esprit 2 – Burnaby
Fairmont Pacific Rim – Vancouver
First on First – Vancouver
Fitzsimmons Walk – Whistler
Ginger – Vancouver
H & H – Vancouver
INvue – Kelowna
Mariner – Vancouver
Millennium Waters – Vancouver
Patina – Vancouver
Quattro – Surrey
Silhouette – Burnaby
Sophia – Vancouver
Tangiers Townhouses – Revelstoke
The Breeze at Airdrie – Calgary
The Exchange – Vancouver
Three Harbour Green – Vancouver
TV Towers – Vancouver
Watermark – South Surrey
Watermark Beach Resort – Osoyoos
Westwood Village Edgemont – Coquitlam
Whitetale Lane – Coquitlam
Woodwards District – Vancouver

That’s quite the list.  It’s fascinating that even with the recent rebound in the market developers are still finding it easier to sue pre-sales buyers rather than release the unit back to the market to find a new buyer.  Do we have more inventory that buyers out there?  I’m guessing no one told those rushing to buy that homes are a place to live first, a source of wealth second.

Thanks to Stanislav and Arit for pointing out the links.

City council unanimously endorsed a plan Tuesday night to create a high-density, mixed-use neighbourhood of about 7,000 people around BC Place Stadium and GM Place on the final undeveloped section of the former Expo lands.

http://www2.canada.com/vancouversun/news/story.html?id=99d209cf-02b9-4a4f-aca4-4abc8f7fb86a

The controversial concept includes a new civic plaza plus four million square feet of residential space and 1.8 million square feet of office space.

What it doesn’t include is the 2.75 acres of park space per 1,000 people that city council holds as a goal.

So less parkland, but parks are green right, and city council wants Vancouver to be the “greenest city” right?  …few parks in this development sadly.

As proposed, densities in northeast False Creek will be among the highest in the downtown peninsula, the report said, noting the high-density push is being driven by the city’s goal of becoming the greenest city in the world by 2020.

Will this be a success?  Will it result in a Vancouver’s first ghetto thus making us truly an international city complete with concrete all rental ghetto?

It may be raining, but at least it’s the weekend!  Let’s do our regular end of the week news roundup and discussion.  Here are a few stories I’ve noticed lately:

-City council endorses lots of little condos with very little green space.
-Are you ready for higher mortgage rates?
-Put on your chicken suit and let’s have a party!
-The lifecycle of a bubble (graph)
-BC to jack up threshold on new house HST
-Playing the international real estate market
-US housing crisis hits new level

So what are you seeing out there? Post you news links, thoughts and anecdotes here and have an excellent weekend!

Rock bottom interest rates are working their magic as real estate sales leap up to record levels. Was that the shortest correction ever? Even as unemployment levels creep up, house sales are brisk and prices are rising, leading some to believe we’re in a housing bubble.  Scotia Capitol is the latest to use the ‘B’ word in public:

“Is Canada in a housing bubble? Probably, but low rates, mortgage innovation and a relative shortage of new supply are likely to keep it going for a while yet,” Scotia Capital analysts wrote in a report.

And as CREA economist Gregory Klump points out, when it comes to people losing their jobs it’s more of a glass-half-full scenario:

“If we have 10-per cent-unemployment, that means 90 per cent of people are employed,” he said. “People are re-entering the market – they have the confidence to take advantage of bargain-basement prices. There’s been a release of pent-up demand, and that has a long time to play out. Prices have gone as low as they are going to go.”

Whatever is in that glass, it’s working.  Sales in BC hit record levels in October.  And every real estate sales organization and mortgage broker seems to think that it should pretty much carry on indefinitely, and this enthusiasm seems to have been absorbed by the population in general:

According to the CAAMP report, Canadians are increasingly confident that the value of their homes is rising and optimistic about their local housing markets. It also said that the Canadian mortgage market is rebounding and will surpass the $1 trillion mark in 2010.

Scotia Capitol economist Derek Holt points out the obvious when it comes to record low interest rates:

Mr. Holt expects the average mortgage to creep toward 5 per cent within three years, which could mean hundreds of dollars more a month for the average mortgage holder.

For example, a five-year variable rate mortgage at 2.25 per cent on $300,000 would carry a monthly payment of about $1,300, assuming a 25-year amortization period. A move to 5 per cent would boost the payment to $1,750.

“I think that causes a slight pullback on prices,” he said. “Right now, you have conditions that only come around once in a century and it can’t stay that way forever.”

But it’s not like Canadians aren’t used to dealing with heavy debt loads, and we have a distinctly Canadian way of dealing with debt-based money problems: more debt.

Tony Pepe pointed out this article from the Toronto Star. The CEO of Ing Direct Canada is warning that Canadians are buying more house than they can afford and paying them off slower and slower, something that he’s seen before:

Aceto’s former job at ING was chief risk officer. He spent two years in California during the height of the real estate bubble, and felt that Canadians would not be as spendthrift as their American counterparts. But when he arrived back in Canada he was surprised to see that some consumers were acting in a similar way.

“Canadians have been proud internally that we’re very different than the Americans in the way we behave in terms of our spending habits and the way we deal with credit. But over time we have become a lot closer than we think,” said Aceto.

It’s the end of the week, so lets do our economic news round up and open topic discussion. Here are a few stories I’ve noticed lately:

-September new home prices up more than expected
-Canada vs. USA – the new realty
-Putting all your retirement money into your house?
-Home improvement stores fear end of tax credit
-Metro builders ease off discounts in hot market
-Olympic rental scams on the rise
-Canadians are slaves to credit
-Canada Line on track to lose millions over next 15 years
-Conference Board: BC to get gold in 2010.
-The Conference Board prediction from 2008 is here.
-Critics blast condo / stadium mix
-Limp demand will create weak Canadian market
-The carry trade and ‘bubble like conditions’
-only 5% of Americans plan to buy a home in 2010

So what are you seeing out there?  A boom reborn or a double dip recession?  Post your news links, thoughts and anecdotes here and have an excellent weekend!

Blueskies pointed out this article in the Globe and Mail – Apparently industrial land prices in Metro Vancouver have dropped as much as 30% over the last year.  Vacancy rates for industrial land is also on the rise.

The value of industrial land in Metro Vancouver decreased by as much 30 per cent in the last year as speculators desperately unloaded land bought near the market’s peak into a market with little demand.

“If there is no demand to build, it is no surprise vacant land is the first asset to be disposed of,” said Avison Young principal Rob Gritten. “Speculators who entered this market in the late stages of the bubble, and with no income to support carrying costs, have been forced to discount significantly to attract bids.”

Silly speculators, don’t they know that residential condos is the place to invest?

Since their recent lows, both the Vancouver housing market and global equity markets have had a surprising rise.  This despite fewer and fewer people actually drawing a paycheque.  The unemployment rate in the US recently surpassed 10%, and is much higher if you count the people that have given up looking for work or run out of unemployment benefits.

In Canada it’s a similar story with a bit of a lag.  In October alone Canada ‘unexpectedly’ lost 43,200 jobs and today saw news of EA cutting 1,500 jobs with a ‘significant’ number of them from their Burnaby campus.  Other cuts were announced by Kodak which is shifting development work from Victoria and Burnaby to Israel.  The latest round of cuts leaves them with roughly 500 employees in BC, down from 1,265 in July 2008.

According to CIBC the quality of jobs left not just in BC, but all across Canada has taken a nosedive in the last 6 months.

There was a time when Vancouver fancied itself a bit of a high-tech economy, with a number of video game studios providing good paying jobs locally.  The recent round of cuts takes some of the shine off that image.  Are there growth industries left in Vancouver that will offer decent incomes to support our high cost of housing?

It’s the end o’ the week!  Lets do our regular round up of recent economic news.  Here are a few stories I’ve noticed lately:

-CIBC: Canadian employment quality ‘nose-dived’ in last 6 months
-Olympic rental market swamped with thousands of empty homes
-Real estate industry could face millions in fines for not lowering fees
-CREA will keep MLS locked down for now
-CMHC needs to review policies
-Is a condo a good investment?
-New US program to allow ‘owners’ to ‘rent’ their homes from bank
-Wells Fargo bets on housing recovery
-A put option for your homes value

So what are you seeing out there? Post your news links, thoughts and anecdotes about the economy and housing markets here and have an excellent weekend!

This should be an interesting prediction to watch. The CMHC has put on their happy hats and made this forecast:

“In 2010, a pickup in home sales, a stronger domestic economy with income growth and low mortgage rates will lead to an increase in new home construction. Greater Vancouver tends to lead the other markets and that’s what we’re now seeing. In 2010, it will spread to the rest of the province. This will prompt builders to start more homes to meet a growing need for housing.”

Now remember, these are the guys handing out money to buyers whom banks wouldn’t otherwise lend to without a higher risk premium.  They have nearly doubled their mortgage insurance cap over the last two years.   When Fanny May and Freddy Mac tried the ‘free loans for everyone program’ down south it didn’t turn out so well, but in Canada we do things differently.  Will the CMHC be able to keep pumping enough tax-payer backed credit into the real estate market to make this forecast come true or will the whole house-of-cards come tumbling down in crash part deux?