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
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 a building is really sold out. I am always told, “Ohhh it is your lucky day a buyer backed out, now there are two units for you to chose from.” The more you say you are willing to spend the… Read more »
RaggedyRenter
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RaggedyRenter

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.
ouch!

jesse
Member

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
patriotz
Member

@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

@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 the expected number of defaults. If we’re selling, it better be soon!

Bo Xilai
Guest
Bo Xilai

“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?

registered
Member
registered

@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

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
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 unless buyers make up the difference. Can any one clarify? Why are these buyers not purchasing existing units in Metrotown? Plenty to go around. This is all too confusing. Sales are down, mortgages tightened, and now pre-sales are going strong.… Read more »
Anonymous
Guest
Anonymous

@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 the first day.
Can’t blame the developers or being smart, just the pre sale buyers for being stupid.

Dan in Calgary
Guest
Dan in Calgary

@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

@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 a place now can still buy a presale. Problem solved until completion.

Anonymous
Guest
Anonymous

@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

@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

@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!

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

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 Station Square?). They can fast turn into non vibrant, unsafe neighbourhoods. I do not see the point in spending so much money for a suite there.

Anonymous
Guest
Anonymous

@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

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, but I’ve heard it’s still 10 to 20% in advance, either in lump sums or monthly payments.

victoria
Member
victoria

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

@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 buyers tried to get out of their contracts. For example at the Olympic Village buyers claimed build quality was not up to contract.

Has anyone heard what happened with the lawsuits from the OV buyers, or the one against them?

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

Many Franks
Guest
Active Member
Many Franks

This is worth a tiny, tiny chuckle.

Ralph Cramdown
Guest
Ralph Cramdown

@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

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).

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