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Leaky Condos, rule or exception?

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Heres another article about leaky condos with big repair bills the owners can’t cover. Anyone bored of these yet?

It feels like it’s been more than a decade that we’ve been inundated with leaky condo stories in the news, yet the owners always seem shocked that they have to deal with the enormous repair bills.

This story is from Calgary, where perhaps it’s more of a surprise to people that here in Vancouver where we just expect it.

Hehr said other owners he has talked to are contemplating bankruptcy. “This is a serious, life changing event for people. It’s very tragic.”

Al Sajan, whose company 7 Sevens built the condo complex, said he is surprised to hear the complaints.

He told CBC News he followed building codes and passed all inspections.

“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.

..maybe the developer should have gone for the name 8 Eights instead..

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patriotz
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patriotz
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Like everywhere else in Canada, Calgary has seen practically no multi-unit rentals built for over a decade. As well, Calgary has probably led the country in conversion of multi-unit rentals to condos. You will often hear it said from some quarters (you know who) that the reason multi-unit rentals are not built is because of rent controls. But Alberta has no rent controls of any kind. This is also true of many US markets that saw condo booms. The article above points to the obvious reason – developers build and sell condos because it allows them to pocket the profits today and offload all the future risk to the condo buyers. There is no reason for them to build quality product because the buyers don't care. If condo buyers were willing to pay a price in line with risk and… Read more »
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7 years 2 months ago
Jack
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How did this article get past the editors? It's currently in the front headline section:

Canada's housing bubble close to bursting: Capital Economics

Prices could fall 25% in the next three years

http://www.vancouversun.com/business/Canada+housi…

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7 years 2 months ago
Keeping An Eye On Th
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Keeping An Eye On Th
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@Jack:

"How did this article get past the editors? It’s currently in the front headline section"

They are a little more vigilant on the weekends, they still have to publish some reality.

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7 years 2 months ago
Li Kai Shing
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Corrupt officials flee with $120 billion: report

http://www.vancouversun.com/business/Corrupt+offi…

Estimates by China's central bank that up to 18,000 corrupt officials have fled overseas with over $120 billion in stolen money in the last few years are undoubtedly well short of the truth.

The 68-page report by the People's Bank of China, dated 2008 and marked "confidential," was mistakenly posted on the bank's website a week ago and has since been removed.

But the analysis which cites specific examples of how corrupt officials and Communist party members have, since the mid 1990s channelled their illgotten gains into countries like Canada, the United States and Australia in return for resident status or citizenship, has caused uproar among Chinese netizens.

=======================

Not me…..I earned my wealth.

Pick (20) 6/49 winners in a row…never bet on Canucks….and have honest realtors and stockbroker.

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7 years 2 months ago
Mortgage Free
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http://www.marketwatch.com/story/is-china-driving…

Wow, at least someone factually reports on HAM…

Looks like its a real factor bears…

Another variable you missed in you long line of failed predictions…

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7 years 2 months ago
Keeping An Eye On Th
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@Mortgage Free:

Thanks for the link, further proof of a bubble.

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7 years 2 months ago
pricedoutfornow
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“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.

So….basically this developer is admitting that condos are not meant to last beyond ten years? Great! I'll keep that in mind next time I go condo shopping (which will be oh, never).

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7 years 2 months ago
patriotz
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@Mortgage Free:

What "factual reports"? Any real statistics from objective sources?

No.

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7 years 2 months ago
paradox
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3.7% inflation rate and interest rates at 1%.

Time for Carney to make another speech how we should not get too much into debt. What a joke our institutions are becoming.

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7 years 2 months ago
DaMann
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@paradox: Yah, Carney is officially a joke. Quit yapping. I got a cost of living increase at work for 3.4 %, last few years was virtually nothing, proof is in the pudding, inflation has gone up over 3%, yet nothing. People just laugh at Carney now. Was out with a friend who owns 2 condos. He said I would buy another one if I could leverage, then we got onto bubbles and RE. He laughed and said low rates are here to stay. People really do think low rates are the "new way" No one is listening to Carney, people keep gorging on cheap money. You can talk all you want but you start to sound like a clown after a while. So what happened to the BOC mandate of 3% inflation? Seems to be the Govs are wanting to… Read more »
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7 years 2 months ago
Tick Tock
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"What “factual reports”? Any real statistics from objective sources?"

___________

According to a report by consultancy Colliers International, 2,527 homes were sold in the first quarter of 2011 in Vancouver, up 35% from a year earlier, with the spike in sales mainly due to a surge of investors from mainland China. The report noted that Chinese investors accounted for 29% of total home sales in the first three months, and stated that number is likely to keep rising.

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7 years 2 months ago
DaMann
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@DaMann:

Oops, I meant BOC mandate of 2% inflation.

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7 years 2 months ago
DaMann
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@Tick Tock:

I saw that Christy Clark says that BC will do nothing to discourage foreign investment in BC real estate. They welcome it. Just lost my vote!

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7 years 2 months ago
Dave
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@patriotz: Developers are primarily in the business of development. That means you build something and sell it. The business of development is different than the business of rentals. A percent of new condo sales goes directly into the rental stock. Many developments have buyers who take multiple units and rent them out. Why would a developer exclude a portion of their market? That makes no sense. I give buyers more credit than you with respect to risk and return. We are in a low return environment. Real estate prices reflect that along with supply and demand. You can't have your cake and eat it to. You criticize quality and then go on to claim that prices should be half. Believe it or not, the two are linked. It's also not possible to build condos that would sell for half current… Read more »
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7 years 2 months ago
Dave
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@paradox:

It's basically free money. You get paid to take on debt.

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7 years 2 months ago
Laibach
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Christy Clark is a clown but that clown is our Premier, not good at all…

For all of Premier Christy Clark's upbeat qualities, she too often conveys the impression of someone who is making things up as she goes along.

Read more:

http://www.vancouversun.com/Clark+never+ending+ca…

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7 years 2 months ago
Patiently Waiting
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HAM buying pre-sales in New West. Suckers. Look at it this way, stupid Chinese speculators are creating local construction jobs and adding to housing supply.

http://www.marketwatch.com/story/is-china-driving…

"In late May of this year, more than 400 people lined up to purchase apartments at a site in New Westminster City, a suburb of Vancouver. Within two and half hours of the start of the sale, all 153 units had been sold.

The otherwise unexceptional set of properties stood out on the sole basis that they attracted unprecedented excitement from Chinese investors.

Bill Morrison, head of sales for the project, told local media that they had not considered marketing the apartments to Chinese buyers until the project was 50% complete, but, “their demand was crazy and Chinese clients accounted for 40% of the total transactions."

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7 years 2 months ago
patriotz
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patriotz
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@Dave: You criticize quality and then go on to claim that prices should be half. Believe it or not, the two are linked. Indeed they are. In RE, the higher the price (I mean within the market cycle for the same type of property), the lower the quality. Reasons? The higher the price within the market cycle, the more willing buyers there are, and the less discriminating they are, so the less attention the builder has to give to quality. In addition, the more units that are being built at any given time, the more unskilled labour needs to used. This isn't just theory – it's reality. As prices in Vancouver got higher and higher, quality became lower and lower. The highest quality properties were built during the 1930s, when real prices were at an all time low. There were… Read more »
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7 years 2 months ago
jesse
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"Chinese buyers of overseas property can roughly be divided into three groups.

The first group are those studying overseas. Their well-to-do parents prefer purchasing homes rather than renting homes overseas, and some even purchase large houses, renting out portions to partly fund their children’s studies."

Well-to-do parents purchasing large houses, renting out portions to partly fund their children's studies.

Yeah…

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7 years 2 months ago
Not much of a name..
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@Dave:

You get paid to take on debt.

Quote of the century. I guess that sums up the prevailing attitude today. No wonder we are standing at the precipice.

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7 years 2 months ago
Dave
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@patriotz:

Great idea. Let's start another Depression so that build quality goes up.

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7 years 2 months ago
patriotz
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@Dave:

Let’s start another Depression so that build quality goes up.

You (I mean the RE and financial industries) already have.

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7 years 2 months ago
Laibach
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I think we mentioned something like this before on this blog…

Probably the biggest reason why Mr. Carney did not mention the possibility of a bubble is that its presence isn’t a necessary condition for warning Canadians about the importance of preparing themselves for a significant decline in housing prices in the medium term.

(Stephen Gordon is a professor of economics at Laval University in Quebec)

http://www.theglobeandmail.com/report-on-business…

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7 years 2 months ago
patriotz
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@Laibach:

Gordon is an expert at obscuring the obvious:

This isn’t to say that Canadian housing markets are bubble-free; the point is that it’s very difficult to make such a determination in real time looking at available price data. Even in the U.S., the most convincing contemporary evidence of a housing bubble was the degradation of mortgage underwriting standards.

Baloney. Back in 2005, every source which successfully identified the bubble in the US did so on the basis of price/rent and price/income. Lending standards were mentioned, if at all, as an enabling factor, not as a primary indication of a bubble.

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7 years 2 months ago
Anonymouse
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@pricedoutfornow:

'“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.'

Hyundai do 10 year engine warranties, don't they?

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7 years 2 months ago