Friday Free-for-all!

Hey, it’s springtime in paradise!  It’s also the end of another work week and that means it’s time for another news roundup and open topic discussion thread for the weekend.  Here are a few recent links to kick off the chat:

It’s looking like a day for a 16k party
RE/Max: Housing off to a strong start
Who’s in charge of regulation?
Expect no housing moves in budget
CMHC to dramatically curtail growth
Risks of CMHC mortgage cover
What now Mr. Flaherty?
Affordable housing, why bother?
10 story wooden condo tower
UBC housing action plan (VIDEO)
People don’t like a driving tax
No springtime for chinese property market

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

Sort by:   newest | oldest | most voted
bubbly
Member
bubbly

10 story wooden condo tower

They really mean “10 story particle board condo tower”.
Canada is taking construction shittiness to the next level…

Bullocks
Guest
Bullocks

I’m getting a little worried. I thought an inventory of 16,500 by the end of March would be safe as houses. But I’m thinking I’ve overestimated as it looks like more and more listings are being pulled or expiring. However the sales/list ratio is still looking bearish.
But we may not need to look at inventory as to the main indicator of a slowing market. Slowing sales are a good enough indication to me that buyers are running out of money. I think the condo market is going to be the first to post a significant fall as I think it has the highest percentage of over-leveraged investors/speculators.

patriotz
Member

Because CMHC is approaching its limit, it is rationing the amount of portfolio insurance that it sells banks to insure pools of mortgages. Spokesman Charles Sauriol said it is giving priority to insurance for individual homes.

And this is the real story. Jimbo wants to keep the bubble going, so he’s assigning CMHC’s remaining headroom to homedebtors rather than to banks which want to insure their existing mortgage portfolios.

Diabolical. The banks will still be falling all over themselves to issue mortgages – because they need the business – but they won’t be able to get protection from losses on existing uninsured mortgages.

Turkey
Guest
Turkey

And, just for Friday, here are some crocodile tears: Houses are never just investments

nvanforlife
Guest
nvanforlife

Why has this not been posted on the front page for fodder on this blog? This is big news! First Australia. Now London. Next Canada?…I can only dream.

http://www.mindfulmoney.co.uk/10987/sector-watch/budget-2012-london-property-meltdown.html

VMD
Member

CPI/Core CPI rises for 3 straight months.

         CPI   Core-CPI
2012-02  2.6    2.3
2012-01  2.5    2.1
2011-12  2.3    1.9

Core-CPI is at its highest level since Dec 2008
If it keeps heading up, BoC’s gonna be under more pressure to hike rates..

http://www.bankofcanada.ca/rates/price-indexes/cpi/

Apocarypse Now
Guest
Apocarypse Now

Telus Garden Pre-Sale on Craigslist:
http://vancouver.en.craigslist.ca/van/reo/2895388482.html

“You can make down payment of 15%- 20% of $300,000 1 bedroom now, and 3 years after the construction is over, the value of the property will go at 35% up”

That’s quite a bold promise by the seller. I wonder if he’s guaranteeing that 35% increase.

Apocarypse Now
Guest
Apocarypse Now

And a Marine Gateway flipper,already;
“SOLD OUT – LAST CHANCE TO OWN @ MARINE GATEWAY if you missed out”
http://vancouver.en.craigslist.ca/van/reo/2916630369.html

Yaya
Guest
Yaya

@Apocarypse Now: I wonder if he’s guaranteeing that 35% increase.

If he could guarantee the increase he wouldn’t be selling it. It’s just as likely (or more likely) to be worth 35% less after 3 years.

Just ask buyers at the Olympic Village.

Yaya
Guest
Yaya
Does anyone here remember news stories a couple of years ago about developers going after presales buyers for the difference between the contract price and the current (lower) market value of their condos? I’m trying to remember if people who bought from flippers were able to get out of their deals and it was the person that originally signed the contract with the developer was screwed? Let’s say Farah Flipper buys a presale in Marine Gateway and sells it to Johnny Howmuchamonth. The unthinkable happens and the market starts to crash. Upon completion the unit has a market value 35% less than the contract price and Johnny decides he doesn’t want to buy the unit, he’d rather just give up his deposit and walk away. Does the developer go after Farah or Johnny for the difference between the contract price… Read more »
mino3
Member
mino3
Telus Garden prices are out: https://www.mylasso.com/FileWarehouse/Users/User_10116/Documents/TELUS%20Garden%20VIP%20package%20final.pdf Home Type Floors Size Range Price Range 1 Bedroom + flex 6-38 467 - 569 sq ft $279,900 - $500,000’s 2 Bedroom + flex 7-21 696 - 774 sq ft $469,900 - $700,000’s 2 Bedroom + flex* 7-48 802 - 1,131 sq ft $539,900 - $1,000,000+ 3 Bedroom + flex** 23-48 1,132 - 1,355 sq ft $829,900 - $1,500,000+ Signature Suites** 49-50 1,161 - 1,668 sq ft $1,300,000 - $2,000,000+ Penthouses available upon request *Includes 1 paking stall **Includes 2 parking stalls Looks like $700/sf to $1000/sf. Actually, $/sf goes UP as the unit gets bigger. When you’re renting, $/sf goes DOWN as the unit gets bigger. The only way to explain this inversion is that prices have nothing to do with fundamentals? Also, doesn’t the tower seem asymmetrical? Like it’s going to tip… Read more »
mino3
Member
mino3

And here’s the price chart that hopefully fits on a mobile phone…

Home Type     Floors  Size Range  Price Range
1 BR + flex   6-38    467-569sf   $280K-$500K’s
2 BR + flex   7-21    696-774sf   $470K-$700K’s
2 BR + flex*  7-48    802-1131sf  $540K-$1M+
3 BR + flex** 23-48   1132-1355sf $830K-$1.5M+
Signature Suites** 49-50 1161-1668sf $1.3M-$2M+
Penthouses available upon request

*Includes 1 paking stall
**Includes 2 parking stalls
Yaya
Guest
Yaya

@Yaya: I did a little search and found the answer to my own question. Apparently the original flipper holds responsibility in something goes wrong with a presales resale:

http://www.househunting.ca/homes-and-gardens/theprovince/story.html?id=5a95b7ea-5396-409f-b925-70e2325338e3

For people that think this is an unlikely scenario here are a couple of other links I came across:

Amacon and Onni sue presales buyers for backing out

That was in 2009 when developers went after buyers for damages beyond their original deposit. Looks like things went better for OV presales buyers, they only went after the deposits so most of their losses were capped at around $100,000:

http://vancouvercondo.info/2011/02/ov-buyers-sued-for-wanting-out.html

registered
Member
registered

Re: “Affordable housing in Vancouver? Why?”, from the author’s Sun bio:

“After graduation, he applied at every newspaper in Canada and received two replies: one from the Owen Sound Packet and Times, one from The Vancouver Sun. The Sun paid more handsomely. He has been with the paper since 1976, an awfully long time to work in one place.”

This ‘journalist’ has been in Vancouver since the mid Seventies and has the gall to draw folksy comparisons between his and contemporary experience? No point holding Pete to task for ignorance of affordability statistics, his employer doesn’t treat research as a job requirement.
Wrapping dead fish in that rag should be actionable by PETA.

Anonymouse
Guest
Anonymouse

@mino3:

“(which are $0.48/sf!)”

Doesn’t sound outrageous to me. Seems on the lower-end of the spectrum, actually.

Anonymouse
Guest
Anonymouse

@Yaya:

“What’s the legal status of these presales contract resales?”

Probably whatever it says in the contracts that the presales buyers sign.

oneangryslav2
Guest
oneangryslav2

@Yaya: I’m not a lawyer, I only play one in my relationship.

I seem to recall that the developer has every right to go after Farah Flipper since her name is on the pre-sale contact.

VMd @work
Guest
VMd @work
CMHC To Gradually Up Mtg Insurance March 23, 2012 OTTAWA (MNI) – In order to slow the booming Canadian housing market, the Canada Mortgage and Housing Corporation this week signalled it plans to increase mortgage insurance gradually over the next few years in an effort to hold-back the growth in the mortgage market. A C$600 billion limit on the amount of insurance CMHC can have outstanding remains the reason for the change. By curtailing the credit available to borrowers, the government intends to lay out a soft landing for the booming housing market — valued at close to C$1.1 trillion. The CMHC administers all the mortgages in the Canadian market and tries to control risk in the market by providing mortgage insurance. The recent surge in the housing market has inflated CMHC’s insurance portfolio significantly and it is expected to… Read more »
rp1
Guest
rp1

#6 @VMD: “Core-CPI is at its highest level since Dec 2008
If it keeps heading up, BoC’s gonna be under more pressure to hike rates..”

I doubt the Bank of Canada makes decisions according to their mandate anymore. They have been making excuses since Fall 2010, when all indications are they should have raised to 1.25%. We’re still waiting on that. In the meantime, they have topped Alan Greenspan. My only hope is that the name “Mark Carnage” gets some traction after this.

WFT?
Guest
WFT?
@Anonymouse: “What’s the legal status of these presales contract resales?” Without reading the particular contract at issue, it is impossible to say. Contracts can be drafted in infinite variations and talking about the legal status of one in a vaccum is not meaningful. However, if the contract includes a term that allows it to be assigned, then generally speaking and if there are no terms to the contrary, the new assignee (the person who takes over the contract from the original “buyer) steps into the shoes of the original buyer and is subject to all the obligations to the developer that the original buyer had. To have an assignment that would preserve the original buyer’s liability to the developer seems absurd and if that was the case no rational original buyer would ever assign a contract to someone else because… Read more »
WFT?
Guest
WFT?
“What’s the legal status of these presales contract resales?” Without reading the particular contract at issue, it is impossible to say. Contracts can be drafted in infinite variations and talking about the legal status of one in a vaccum is not meaningful. However, if the contract includes a term that allows it to be assigned, then generally speaking and if there are no terms to the contrary, the new assignee (the person who takes over the contract from the original “buyer) steps into the shoes of the original buyer and is subject to all the obligations to the developer that the original buyer had. To have an assignment that would preserve the original buyer’s liability to the developer seems absurd and if that was the case no rational original buyer would ever assign a contract to someone else because they… Read more »
VMd @work
Guest
VMd @work

@VMd @work:
nvm, it’s the same news as yesterday’s. I thought CMHC is about to increase its mortgage insurance fees. But..they may just do that as well, who knows.

Drachen
Member

@Yaya:

“Does the developer go after Farah or Johnny for the difference between the contract price and the current market value when they resell the condo?”

The developer has a contract with Farah. They have no legal standing to go after Johnny, because Johnny has a contract with Farah, not with them.

The developer sues Farah. She loses, almost certainly. She in turn can choose to sue Johnny, depending on their contract she may win, she may lose, but considering she’s already fighting one losing legal battle and being forced to take on a mortgage she probably can’t handle it’s doubtful she’d have the resources to hire a lawyer to go after Johnny.

Rakim
Guest
Rakim

@fixie guy: The baby boomers are the true entitlement generation.

Anonymous
Guest
Anonymous
@Yaya: “I’m trying to remember if people who bought from flippers were able to get out of their deals and it was the person that originally signed the contract with the developer was screwed?” All or most presales have terms for assignment in the contract. There is often an assignment fee paid to the developer. The developer has to approve the assignment. If the developer approves the assignment there is no liability for the flipper unless this is specifically in the assignment contract which would not be normal. There may have been cases where a flipper does not involve the developer in assigning the unit. It those cases they are still liable to the developer. You would have to be pretty stupid to do an assignment like that. But then again you have to be pretty stupid to buy a… Read more »
wpDiscuz