Sold out in Burnaby 2015

Despite the soft market and falling sales another lower mainland pre-sales project has sold out.

..or at least the first phase has.

Station Square at Metrotown says they have sold out their first tower which will be 35 storeys and completed in 2015.

The other towers could reach 57 storeys and are planned to be completed by 2020.

Burnaby Mayor Derek Corrigan notes the city is in transition. There are plans to add 11 residential towers at Brentwood Town Centre, and two of them could reach 70 storeys.

“It’s changing us from a bedroom community to the centre of the region,” Corrigan said.

He added that it is key is to develop the condos along existing transit hubs.

“There aren’t many choices. Either we can develop the agricultural land and the park land that is so important to our region, or we can go up. We can develop more density around stations,” Corrigan said.

In March, hundreds of people lined up for the chance to buy condos at Marine Drive and Cambie Street in Vancouver.

“Last year we had a very strong market where you had numerous projects that were achieving really strong presales right off the bat,” said Michael Ferreira of Urban Analytics.

Demand has decreased since then, but despite that all 269 units were sold Saturday.

Greg Zayadi of Anthem Properties Group said the buyers were people who will keep the condos for a long time.

“It’s not the investor of old that thinks the market is going to go up another ten or 15 per cent and selling it at the end of the day. They’ll be retaining this unit for a long time to come,” he said.

Read the full article over at CTV news.

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Waiting to exhale
Guest
Waiting to exhale
3 years 8 months ago
Do people really still believe the sales figures that builders provided to MSM? It is one of the oldest tricks in the book. Make something look like there is incredible demand for and further demand is created. Is there a non-partial third party that verify the builder’s sales stats? I think not. The room for fudging the numbers is too great for any builder to resist. Unfortunatley, there are next to zero repercussions for claiming false sales numbers. I have been to many sales centers of “Sold Out” buildings over the years and never have I been turned away because… Read more »
RaggedyRenter
Guest
RaggedyRenter
3 years 8 months ago
I don’t know about that. I passed by the place Saturday 1:30PM and it was busy, there were about 50 people in the lineup. Silver’s sales office across the street is pretty quiet. They’re still not sold out and they lowered the price by $10k and another 10k in decor allowance. This is after lowering the price by 27k in August. Somebody should keep track of these price drops. This guy (V972119) is selling his unit at the kimpton for 739k, he probably paid around 750k. The developer is selling units with similar size for 649k with 100k price guarantee.… Read more »
jesse
Member
3 years 8 months ago

So what will presales agreements require from buyers? Say… proof of income or other guarantee they can complete requisite deposit scedules? I assume that’s rather difficult if completion is three years away.

Just wondering… for no particular reason.

rp1
Guest
rp1
3 years 8 months ago
patriotz
Member
3 years 8 months ago

@rp1:
Flaherty: “We’ve taken four steps over the last four years to reduce the exposure there for taxpayers.”

Well if you’re going to lie, why not lie big. The taxpayers’ exposure to CMHC has of course increased massively over the last 4 years as a direct result of the Cons’ juicing of the RE market.

Flaherty’s talk of “privatising” CMHC is IMHO a smokescreen to take attention away from what is likely coming, a bailout at taxpayers’ expense and a privatisation of any future profits.

CMHC’s liabilities and guarantees cannot be privatised. The taxpayers are stuck with them.

More Data Please
Guest
More Data Please
3 years 8 months ago
@patriotz: re: “CMHC’s liabilities and guarantees cannot be privatised.” Perhaps not entirely, but what would it be worth to pay the new owner to take over the train wreck? $2B, $5B, $10B, $20B, $50B, $100B, $200B,… Is there a price that would be a net benefit compared to putting the total liability into the national debt? Carney has input on this. Privileged information on Carney’s interest rate schedule would put the Government at an advantage in the fair value calculation. The debt is denominated in $CAD, don’t forget. Presently, CMHC produces positive cash flow on the massive leverage and roughly… Read more »
Bo Xilai
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Bo Xilai
3 years 8 months ago

“Greg Zayadi of Anthem Properties Group said the buyers were people who will keep the condos for a long time.”

——
I didn’t realize developers developed the gift of mind-reading.

How would Zayadi know buyers’ long-term intentions?

fixie guy
Guest
fixie guy
3 years 8 months ago

@5 patriotz Says: “Flaherty’s talk of “privatising” CMHC is IMHO a smokescreen to take attention away from what is likely coming…”
It’s also in line with what I’ve suggested in the past, a strategy of twisting social programs to the breaking point in order to convince voters the concept, rather than the execution, is irreparable. Enriching the banks in the process is a double-win. Harper’s ideological kin are the American Republicans.

Brian
Guest
Brian
3 years 8 months ago

One pre sale sells out amidst how many developments that are going on and this is big news?
Talk about selective reporting

Burt
Guest
Burt
3 years 8 months ago
I am a little confused about the way pre-sales will work in a tighter credit environment. Are all these buyers currently pre-qualified? Or are they required to qualify upon completion? I was always working under the assumption that you leave a deposit with the developer, but no bank was willing to keep terms in play until completion. It doesn’t seem reasonable to guarantee a rate, or terms until 2015. That leaves me wondering if all these buyers will be facing similar scenarios that those on projects completing in 2008 did. Values coming in under assessment and banks unwilling to lend… Read more »
Anonymous
Guest
Anonymous
3 years 8 months ago
@Waiting to exhale: Couldn’t agree more, seen it many times. Here’s the marketers math: 269 units to sell, lineup of 100 buyers. Before the doors open, insiders reserve all of the best units for themselves (creating yet even more illusion of demand) and leave ~100 scraps for the people in line. End of the day presale buyers feel lucky/smart that they got in before the “sell out” and as you mentioned, the sales centre stays open even though sold out so that anyone walking in off the street can be sold one of the units that was set aside on… Read more »
Dan in Calgary
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Dan in Calgary
3 years 8 months ago

@patriotz, “Flaherty’s talk of “privatising” CMHC is IMHO a smokescreen to take attention away from what is likely coming, a bailout at taxpayers’ expense and a privatisation of any future profits.”

I think you nailed it. But at this stage in the game, what else can he do? Still p*sses me off though.

Anonymous
Guest
Anonymous
3 years 8 months ago
@jesse: “So what will presales agreements require from buyers?” They require you to sign a 200 page document created by the developers lawyers and provide a deposit. They don’t ask for income, etc. The deposit is what secures the unit and it is up to the buyer to pay for or qualify for a mortgage once it is complete. If you can’t you lose the deposit and are responsible for any loss to the developer if they can’t resell the place for the same amount. The new CMHC rules make presales more attractive because people who cannot qualify to buy… Read more »
Anonymous
Guest
Anonymous
3 years 8 months ago

@patriotz: “Flaherty’s talk of “privatising” CMHC is IMHO a smokescreen”

They are on the hook for the current mortgages but can privatize it going forward. This is a good thing. It will likely mean higher (CMHC) insurance fees and stricter qualifications if the private sector was to take it over and expect a profit. This could be the next round of tightening.

Ralph Cramdown
Guest
Ralph Cramdown
3 years 8 months ago

@Anonymous: “[CMHC privatization] will likely mean higher (CMHC) insurance fees and stricter qualifications if the private sector was to take it over and expect a profit.”

Maybe, maybe not. Genworth already operates in Canada, at about the same fees as CMHC charges, and only 90% of a claim loss for them is backstopped by the government.

Interestingly, mortgage insurance in the US is a premium paid monthly, rather than an upfront fee that lasts the life of your mortgage. Perhaps that puts greater incentive on people to pay it down to a conventional LTV quickly?

jesse
Member
3 years 8 months ago

@Burt: One possibility is that it’s viewed as a straight gamble. If you’ve ever visited these sales centres and heard the pitches it makes some sense there is still interest.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 8 months ago

Don’t worry about the sell out guys. I’m sure the market collapse is right around the coroner. Someday soon. vancouvercondo.info, 6 years old and counting.

If you had a kid when vancouvercondo.info was created they’d be in grade one now. Maybe we’ll see the collapse when junior graduates highs school? It’s not that far off.

painted turtle
Guest
painted turtle
3 years 8 months ago
Same strategy in my hood. They just completed 8 apartments (renamed ‘townhouses’) and sell them in the $600-$800. Cheap construction. A paradise for noise complains. They had several open houses with no activity, no cars parked in front of the building. They gave up on the balloons really fast. However, the 3 least desirable suites have a SOLD sign on them. I am convinced these are fake, and meant to attract interest. About Metrotown. This place already reminds me of some ugly suburbs in large cities like Paris, where it is only high apt towers for commuters (isn’t the name… Read more »
Anonymous
Guest
Anonymous
3 years 8 months ago

@Ralph Cramdown: “Maybe, maybe not. Genworth already operates in Canada, at about the same fees as CMHC charges, and only 90% of a claim loss for them is backstopped by the government.”

Obviously Glenworth cannot charge more than the CMHC insurance rate in order to compete. If CMHC insurance was gone the market would set the rate based on risk. Since the banks could just offer low down payment mortgages under the same terms as CMHC insurance does I would guess it does not make sense at the current rates otherwise the banks would be competing with CMHC.

John
Member
John
3 years 8 months ago
I bought a condo in 2004 (occupancy around 2007, sold in 2009). At the time you had to put 5K down (personal cheque) and you had 5 days to back out (provincial requirement). Some months later I had to make the first deposit payment (10%) and about a year after than a second deposit (10%). While the building may be “sold out” now, over the next 5 days some people may come to their senses. After that, they are taking a loss to exit if the developer lets them. I don’t know what the payment schedule is for modern buildings,… Read more »
victoria
Member
victoria
3 years 8 months ago

painted turtle,

You are so right. I lived in Paris for 14 years and the towers in the burbs were terrible. They started off nice and quickly turned nasty.

I remember those ones that had round windows and clouds painted on them. They were a pale blue. There are of course some really nice Parisian suburbs but the towers suburbs were horrible.

I wonder if this will happen in Vancouver.

Veni Vidi Vci
Guest
Veni Vidi Vci
3 years 8 months ago
@Anonymous: At the very least the developer keeps the deposit if the buyer gets cold feet and doesn’t want to complete the purchase of a condo at a price higher than current value. As we saw a few years ago the developer will also go after the pre sales buyer for the difference between the price they agreed to and the current market value at completion (if it’s dropped in price): http://vancouvercondo.info/2009/02/more-lawsuits-against-presale-buyers.html You can also bet that developers are being more cautious about any loopholes that will let a buyer out of their contract – that was how most presales… Read more »
Many Franks
Guest
Many Franks
3 years 8 months ago

This is worth a tiny, tiny chuckle.

Ralph Cramdown
Guest
Ralph Cramdown
3 years 8 months ago

@Anonymous: “Obviously Glenworth cannot charge more than the CMHC insurance rate in order to compete. If CMHC insurance was gone the market would set the rate based on risk.”

But why are they writing policies at all if they think the risk is underpriced? That’s a VERY foolish thing to do in the insurance industry, and it isn’t like they’re going to get your home and auto business to make it up. Hey, here’s what they charge in the US. Note that there’s a LOT more segmentation:
http://mortgageinsurance.genworth.com/RatesAndGuidelines/RateCards.aspx

Burnaby
Guest
Burnaby
3 years 8 months ago

I passed by Station Square on Saturday around 11.30 AM and then again at around 1.00 PM. There were around 20-25 people waiting in the line at 11.30 AM and around 35 people at 1.00 PM. Even I stood in the line for 1-2 minutes and talked to the marketing guys.

I just can’t believe this building is sold out on Saturday. There is absolutely no chance as many people I can see were just standing to check out (many people walk by this place and I am sure they were not carrying any check books).

Meh
Guest
Meh
3 years 8 months ago

Maybe some of these pre-sales buyers will just leave the country if their bets don’t work out. Do the developers have any way to deal with that?

patriotz
Member
3 years 8 months ago
@Anonymous: “Since the banks could just offer low down payment mortgages under the same terms as CMHC insurance does” No they can’t. They are prohibited from lending more than 80% LTV on their own exposure. That’s why mortgage insurance exists in the first place. There is nothing preventing any non-bank business (or individual) from offering 1st or 2nd mortgages right up to 100%. Such businesses are rapidly folding in Canada because they cannot obtain private capital. What does that tell you about the likelihood of any genuine privatisation of CMHC? You might also note that in the US, where RE… Read more »
s
Guest
s
3 years 8 months ago

There was a video on CBC before (maybe the fifth estate) few years ago delving into the marketing tactics of pre sale condos. Basically the sales and marketing are done months ahead of time and the grand opening is just a PR stunt even if it attracts a few buyers they claim it’s been sold out.

M-
Member
3 years 8 months ago

@Burnaby: A chequebook? That’s so quaint. The condo dealers probably have a credit card machine– just put the deposit on your Visa! Who needs money in a bank account anyway?

More Data Please
Guest
More Data Please
3 years 8 months ago

@patriotz: re: “Crown obligations cannot be assigned.”

No, but backstop/bailout obligations could be withdrawn at the Minister’s discretion as a condition of sale of the CMHC. That was the point of my suggesting there might be a lump price less than the full $600B paid to the new owner which would make the unbacked insurance contracts attractive.

Is this not so?

jesse
Member
3 years 8 months ago
For those wondering the fate of Station Square, there’s a condo right across the street above Crystal Mall in the same complex as the Metrotown Hiilton. That place is now, what, about 14 years old now? How are prices holding up there, out of curiosity? I know people want prices to crash (and not least me because I hate capital mis-allocation in principle) but this is the redevelopment of a plot of land directly over top the largest shopping complex in BC, with direct rapid transit access to downtown. I can see why people are hyped about it. That doesn’t… Read more »
pricedoutfornow
Guest
pricedoutfornow
3 years 8 months ago
Re: presales. Friends of mine bought a couple of presale Olympic condos. They fully intended to flip these but were unable to. So they had to arrange financing upon completion. According to my friend (the wife), it was a nightmare, because suddenly they had to find a financial institution willing to lend them the nearly $1 million. Now they are accidental landlords, barely scraping by, and the wife has had to go back to work (she was a stay at home mom before all this came down). We went out for drinks one night about 2 years ago and I… Read more »
southseacompany
Member
southseacompany
3 years 8 months ago
@ s Yes, that video is here: http://www.youtube.com/watch?v=SNyltNIHhgs&feature=plcp It is likely most marketers do this for pre-sales. Station Square received Rezoning back in August/Sept 2011. So it would be highly likely the developers started signing pre-sales contract since then, and they were probably lining up potential buyers even before they received official go-ahead. I knew someone who was on the marketing team for C*onc*rd P*cific. They said that a lot of the buyers of the first phase would also buy into the second if the first sold well. They seem to have a network of regular investors. Still, That’s 265… Read more »
Patiently Waiting
Member
Patiently Waiting
3 years 8 months ago
Some interesting comments in this forum: http://forum.skyscraperpage.com/showthread.php?t=194164&page=9 “Drove by the site this afternoon. There is a crew in front of the site putting on the finishing touches to the public grand opening this Saturday. So far, I have not seen anyone camp outside yet.. Already rumored to have sold 200 units in the last month. They were selling from Anthem’s downtown head office. Most of the units that are left are the ones high up = higher price points. The opening this weekend is a “grand opening” in their new onsite sales office.” — “I didn’t show up until 3:00pm… Read more »
kenny
Guest
kenny
3 years 8 months ago

pricedoutfornow Says: “”I remember her saying “Everything’s maxed out! Line of credit, credit cards, everything! The debt is so big I just don’t even bother thinking about it anymore!” Her husband was pressuring her to cash out her RRSPs to raise some more cash.”

Are they COC’s?

Jeff
Guest
Jeff
3 years 8 months ago
Has anyone else noticed that MLS has ‘disappeared’ thousands of homes for sale in the lower mainland? For the last 3 days there have been 0 homes for sale in Hope, only a couple in Chilliwack/Sardis, only a couple in Mission etc. I watch these areas daily and there are thousands of listings missing. Now, put on your tinfoil hats and tell me if you think they are taking stats on those particular days to show fewer homes for sale. I have to say, if I had a home for sale in one of these areas and it was not… Read more »
Patiently Waiting
Member
Patiently Waiting
3 years 8 months ago
OK so lets look at the cheapest Station Square condos, which are supposedly $280Kish. These will be new bachelor suites in 2015 in a prime location. Let’s assume that in 2015, the “investor” determines its not a good time to sell and becomes an accidental landlord. They get a rate of aprox. 7% on their 25 year mortgage of $230K (downpayments have reduced it from $280K). Condo fees are $300 and other expenses (including insurance) add up to $200. It appears they would need to get well over $2000/month on a bachelor suite to make ends meet. Closest guess, maybe… Read more »
Patiently Waiting
Member
Patiently Waiting
3 years 8 months ago

@Jeff: The site I use indicates over 19K listings throughout the Lower Mainland, stretching from the Sunshine Coast to the Hope area.

Many Franks
Guest
Many Franks
3 years 8 months ago

@Jeff: Hanlon’s Razor generally applies double when we’re talking about real estate professionals.

jesse
Member
3 years 8 months ago

@Patiently Waiting: “Am I missing anything?”

Nope, people are doing the math with low interest rates in mind.

Anonymous
Guest
Anonymous
3 years 8 months ago

@Patiently Waiting: You are missing the fact that the $280k condo will be worth at least $350k (e-sarc turned off now).

southseacompany
Member
southseacompany
3 years 8 months ago

@Jeff: re MLS site

Yes, I noticed that too on the weekend. I usually use the map zooming out to an area including all GVRD east of Langley border to keep track total listings. Last week they were around 20k, as they have been all summer. This week, at 16k.

Unless there’s something wrong with their site (or suddenly 5k units were sold) it would mean a lot of listings expired over the weekend. Listings do trend down toward Christmas, so perhaps folks are pulling off until next spring.

Patiently Waiting
Member
Patiently Waiting
3 years 8 months ago

@jesse: So its about a $500 difference between 7% and todays rates. They’d need $1700 for a new bachelor in Metrotown. That still seems very optimistic. They probably aren’t including a lot of expenses in their calculations too. Maybe they are under the impression that under $1500 rent would work for them 😛

I’m just glad such fools add to our housing supply.

patriotz
Member
3 years 8 months ago
@pricedoutfornow: “Her husband was pressuring her to cash out her RRSPs to raise some more cash. She said she’d calculated that they had about 24 months left before going completely broke. I suggested that perhaps they should see someone about bankruptcy.” Again a mirror of what was happening in the US 4 years ago. I think Mish talked about this issue a number of times. In the end most such people end up with no retirement savings and underwater on their RE “investments”. People like these should stop paying their mortgage and file for BK – and keep their RRSP’s… Read more »
Anonymous
Guest
Anonymous
3 years 8 months ago
Crap. Landlords are splitting and my family is getting evicted. They can’t sell, or even rent, the other westside SFH they bought 2 years ago, so we’re getting the boot right in the middle of the school year so he can move in to the one we’re in. We always knew this was one of the few downsides to renting but didn’t expect it so soon. They took a bunch of money out of the house we were in to invest in the second one, now they own three (including primary residence). They appear to be Exhibit A for several… Read more »
jesse
Member
3 years 8 months ago

@Patiently Waiting: “They’d need $1700 for a new bachelor in Metrotown”

$230K 30 year is $1100 at 4%. Not disagreeing with you but kick up the downpayment and this thing cash flows. You aren’t missing anything — people are ignoring big risks with their investments in these types of properties. I’ve seen the bizarro logic at play and to be frank it’s hard for me to fault the developer for taking advantage. For me to cry for intervention might be interfering with the natural cycle of Darwinism.

vangrl
Member
vangrl
3 years 8 months ago
vangrl
Member
vangrl
3 years 8 months ago
“Re: presales. Friends of mine bought a couple of presale Olympic condos. They fully intended to flip these but were unable to. So they had to arrange financing upon completion” i have a friend in a similar situation….she and a work acquaintance bought two Olympic pre-sales, both 1 bedrooms and both close to $500,000 a piece (i know crazy). These were bought to flip, of course that didn’t work, so they had to come up with financing. My friend had to move into one of the Olympic condos because her Kitsilano condo (one bedroom as well) could generate more rental… Read more »
mclovin
Member
mclovin
3 years 8 months ago

“Crap. Landlords are splitting and my family is getting evicted”

Why didn’t you sign a lease?

mclovin
Member
mclovin
3 years 8 months ago

$5950 / 2br – 2150ft² – Immaculate Brand New 2150 Sq Ft Suite in Olympic Village

I would expect that they could get $4,500 tops for that unit especially since its 2 BD.

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