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.

96 Responses to “Sold out in Burnaby 2015”

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    Waiting to exhale Says:
    1

    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 number of available units magically go up.

    Don’t believe the hype people, ask yourself, who in their right mind would pay $500 plus per square foot in Burnaby with everything that is going around in Vancouver’s real estate market? They are called KNIFE CATCHERS!!! In six month’s time their cuts will be visible and it ain’t gonna be pretty.

    Well-loved. Like or Dislike: Thumb up 73 Thumb down 1

    RaggedyRenter Says:
    2

    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!

    Well-loved. Like or Dislike: Thumb up 33 Thumb down 0

    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.

    Hot debate. What do you think? Thumb up 14 Thumb down 0

    @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.

    Well-loved. Like or Dislike: Thumb up 54 Thumb down 0

    More Data Please Says:
    6

    @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!

    Hot debate. What do you think? Thumb up 9 Thumb down 1

    “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?

    Well-loved. Like or Dislike: Thumb up 50 Thumb down 0

    fixie guy Says:
    8

    @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.

    Well-loved. Like or Dislike: Thumb up 36 Thumb down 5

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

    Well-loved. Like or Dislike: Thumb up 33 Thumb down 1

    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. This isn’t an isolated incident either, SoLo in Brentwood moved a few hundred units few weeks back as well. Not to mention Marine Gateway.

    All this is hard to digest. I have a much easier time digesting financial markets than I do our local housing market. That in it self is a sign of the times.

    Well-loved. Like or Dislike: Thumb up 42 Thumb down 0

    Anonymous Says:
    11

    @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.

    Well-loved. Like or Dislike: Thumb up 38 Thumb down 0

    Dan in Calgary Says:
    12

    @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.

    Hot debate. What do you think? Thumb up 19 Thumb down 0

    Anonymous Says:
    13

    @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.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 0

    Anonymous Says:
    14

    @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.

    Hot debate. What do you think? Thumb up 16 Thumb down 3

    Ralph Cramdown Says:
    15

    @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?

    Hot debate. What do you think? Thumb up 13 Thumb down 0

    @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.

    Hot debate. What do you think? Thumb up 16 Thumb down 0

    Bull! Bull! Bull! Says:
    17

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 5 Thumb down 36

    painted turtle Says:
    18

    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.

    Well-loved. Like or Dislike: Thumb up 34 Thumb down 3

    Anonymous Says:
    19

    @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.

    Like or Dislike: Thumb up 5 Thumb down 0

    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.

    Hot debate. What do you think? Thumb up 14 Thumb down 0

    Victoria Says:
    21

    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.

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    Veni Vidi Vci Says:
    22

    @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

    Hot debate. What do you think? Thumb up 11 Thumb down 0

    Many Franks Says:
    23

    This is worth a tiny, tiny chuckle.

    Like or Dislike: Thumb up 9 Thumb down 0

    Ralph Cramdown Says:
    24

    @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

    Like or Dislike: Thumb up 7 Thumb down 0

    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).

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 2

    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?

    Hot debate. What do you think? Thumb up 20 Thumb down 2

    patriotz patriotz Says:
    27

    @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 prices have now apparently bottomed, almost all (>90%) of high ratio mortgages still go through Fannie, Freddie, or FHA.

    Also re another poster – Crown obligations cannot be assigned. The taxpayers remain on the hook for them until they become moot. The government cannot assign the obligation to insure a mortgage any more than it can assign the obligation to pay back a CSB.

    Hot debate. What do you think? Thumb up 16 Thumb down 1

    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.

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 1

    @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?

    Hot debate. What do you think? Thumb up 16 Thumb down 2

    More Data Please Says:
    30

    @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?

    Like or Dislike: Thumb up 8 Thumb down 1

    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 make it a good investment but they are selling what on the surface looks to be a desirable urban plan.

    There is a history to Station Square, BTW. From what I remember, when it was built in the 80s, there was a dispute between the various developers of that plot of land. There was the original Metrotown (The Bay, Zellers, Toys-R-Us and the above-ground carpark), then Station Square, and the Eaton Centre that was built later. They never agreed to connect their malls together, and only in the past few years they were amalgamated into Metropolis, combining Metrotown and Eaton Centre with the new add-on for the theatres. Station Square was a sort of odd man out in this and only easily connects through the bus loop. I don’t know what’s planned for Station Square — I’ll have to look at the plans — but one hopes it can be better integrated, after over 30 years. There is more history there too, the “bridge to nowhere” that was supposed to expand the mall north of Kingsway only to be kiboshed for whatever reasons.

    Sorry for the long comment, but Metrotown is long overdue for some revitalization, not limited to Station Square. There’s still the morass of low-rise housing south of the Skytrain that’s approaching the end of its useful life and a few malls northwest of Metrotown proper.

    Hot debate. What do you think? Thumb up 21 Thumb down 2

    pricedoutfornow Says:
    32

    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 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. 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. Not sure how things are going for them these days, but I’m thinking not great, given a few things I’ve noticed around their house.
    These people who sign presale contracts should talk to my friends before they go and sign on the dotted line!

    Well-loved. Like or Dislike: Thumb up 42 Thumb down 1

    southseacompany Says:
    33

    @ 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 units sold over a period of 13 or 14 months; averaging 20 units per month. September REBGV stats show 1,556 total sales out of 18,350 listings. So 20 sales equals 1 % or 2% of a months total sales. Not really big news.

    Hot debate. What do you think? Thumb up 11 Thumb down 0

    Patiently Waiting Says:
    34

    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 ish and by that time the only units left for sale were the 1 Beds and the Jr. 1 Beds facing north/Kingsway street.

    Even then, it was still a racous zoo of humanity. Very little elbow room, lots of talking, and the vast majority of people I saw there were Chinese, snapping up the units left and right.

    But the bigger towers will go on sale about this time next year, so there’s hope there.”

    “They did reduce the price by quite a bit. Earlier in the year, they were promoting units starting in the low 300′s. Now with the slowdown they have been advertising them at low $280,000s. So I would say that prices were one of the main reasons it sold out. Just didn’t think it be this quick!”

    “Why does any developer open a freaking showroom in this city? Since everything is sold out the moment it opens.

    Such BS.

    Had flash backs to my first time going to dim sum at age 26… I quickly learned flight or flight and if you have to elbow the old lady in your way you do it.”

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    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?

    Hot debate. What do you think? Thumb up 7 Thumb down 11

    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 being listed by the realtor who will get a massive payday from me when sold, I’d be on the phone to them screaming right now :)

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 0

    Patiently Waiting Says:
    37

    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 $2200/month. Will rents be that high in 2015?

    Am I missing anything?

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 3

    Patiently Waiting Says:
    38

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

    Like or Dislike: Thumb up 5 Thumb down 0

    Many Franks Says:
    39

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

    Like or Dislike: Thumb up 6 Thumb down 0

    @Patiently Waiting: “Am I missing anything?”

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

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    Anonymous Says:
    41

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

    Hot debate. What do you think? Thumb up 11 Thumb down 0

    southseacompany Says:
    42

    @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.

    Like or Dislike: Thumb up 7 Thumb down 0

    Patiently Waiting Says:
    43

    @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 :P

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

    Well-loved. Like or Dislike: Thumb up 20 Thumb down 0

    patriotz patriotz Says:
    44

    @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 – when the properties are foreclosed. But most won’t.

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 0

    Anonymous Says:
    45

    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 of Patriotz’s lessons we’ve all heard.

    There are really slim pickings for rental houses in our little area of the westside. Any recommendations for where to find listings? My wife is now looking at $1M houses in North Van and wavering in her resolve to wait out the housing cycle, despite knowing the timing is horrible. Some look just right for what and where we’d like to eventually buy, but at $600k not $1M+.

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    @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.

    Hot debate. What do you think? Thumb up 14 Thumb down 1

    http://vancouver.en.craigslist.ca/van/apa/3296922385.html

    is that beam about to fall over?

    Like or Dislike: Thumb up 3 Thumb down 1

    “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 income to help her pay the bills…she hated having to move from Kits:( all and all a super crappy scenario.

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 0

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

    Why didn’t you sign a lease?

    Like or Dislike: Thumb up 9 Thumb down 0

    $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.

    Like or Dislike: Thumb up 6 Thumb down 1

    painted turtle Says:
    51

    But it is the home front that is probably keeping Mr. Carney up at night. For the first time in five years, he has a major domestic problem to fret about – housing.

    http://www.theglobeandmail.com/report-on-business/economy/housing/dont-expect-canadas-housing-market-to-have-us-style-meltdown/article4627171/

    Like or Dislike: Thumb up 9 Thumb down 0

    #36 @Jeff: “Has anyone else noticed that MLS has ‘disappeared’ thousands of homes for sale in the lower mainland?”

    It’s probably a bug. There are a lot of signs out there.

    Like or Dislike: Thumb up 4 Thumb down 0

    Headline does not make sense. Everything in article points to worst case scenario (sales, debt to income) but somehow article headline says
    “Don’t expect Canada’s housing market to have U.S.-style meltdown”

    Do they really beleaive

    Hot debate. What do you think? Thumb up 11 Thumb down 1

    Anonymous Says:
    54

    @mclovin: Why didn’t you sign a lease?

    Yes, good point. I’m wishing we had. We’ve been there 5 years and this spring the “lease” was another 24 post-dated cheques and a “I hope you stay forever” statement from the landlord. We were happy because we figured two more years was our timeframe to stay anyway, but in hindsight it was foolish to gamble without something on paper. Now we’re just hoping to convince them to reconsider.

    Hot debate. What do you think? Thumb up 10 Thumb down 3

    pricedoutfornow Says:
    55

    @patriotz:

    Exactly. I have a client who owns a condo in the Okanagan (bought presale for about $250k). The thing is now worth $165k *maybe*. Her mortgage is still huge, still north of $240k I believe (didn’t put much down, plus the CMHC fee tacked on). She rents it out for about $500-$600 less than what the mortgage plus strata is every month. She’s leaving the country to get married. She called me for advice about cashing in her RRSPs a few weeks ago, to fund the condo while she’s out of the country. I bluntly asked her if she’s ever considered bankruptcy. I think she was a bit shocked that I mentioned the “b” word, and I haven’t heard from her since. I honestly think she’s going to end up liquidating all her assets just for this bloody condo, and she’ll never get her money out of it. Bankruptcy would be the smart thing to do in this case, but I guess most people aren’t smart. They’d rather just keep on paying, scraping up every penny they can find until they’re forced into it. Shame, really.

    Hot debate. What do you think? Thumb up 17 Thumb down 2

    “I bluntly asked her if she’s ever considered bankruptcy.”

    lots of people do not know about that possibility..it is kind a taboo theme in canada :)

    Hot debate. What do you think? Thumb up 14 Thumb down 0

    Anonymous Says:
    57

    @Anonymous: ….

    Yes, good point. I’m wishing we had. We’ve been there 5 years and this spring the “lease” was another 24 post-dated cheques and a “I hope you stay forever” statement from the landlord. We were happy because we figured two more years was our timeframe to stay anyway, but in hindsight it was foolish to gamble without something on paper. Now we’re just hoping to convince them to reconsider.

    They can’t kick you out unless they’re planning on moving in (maybe they are but that’s not clear from your original post).

    Hot debate. What do you think? Thumb up 8 Thumb down 3

    Confirmation of the slow but steady drift downward for the westside.

    I posted a week or so ago about a house that should have gone for 1.8m easy last year that eventually sold for 1.5m and change.

    Here’s another:
    v959654
    2952 W. 19th
    Original price 1.828m
    Sold after 107 days for 1.575m
    Nicely renovated house with really nice backyard

    Hot debate. What do you think? Thumb up 18 Thumb down 0

    RaggedyRenter Says:
    59

    Does bankruptcy really release you from the obligation to repay CMHC when the property selling price is lower than the amount owed?

    Like or Dislike: Thumb up 6 Thumb down 0

    @RaggedyRenter: “Does bankruptcy really release you from the obligation to repay CMHC”

    It depends on what’s determined during bankruptcy proceedings. A mortgage debt shortfall is not usually carried through a BK. Which is part of why CMHC will need a government bailout if TSHTF.

    Hot debate. What do you think? Thumb up 15 Thumb down 1

    New Listings 166
    Price Changes 155
    Sold Listings 90
    TI:18943

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 127 Thumb down 1

    @Anonymous: If nothing else, it sounds like they led you to believe that your tenancy was secure. Their acceptance of 24 post-dated rent cheques *could* very well muddy the waters of whether or not you can be kicked out.

    Normally, if you’re on a month-to-month, and the landlord wants to kick you out so that they can move in, they’ve got to give you 60 days notice, and your last month’s free. Or if you choose to leave after only 30 days, they’ve got to give you one month’s rent. In either case, they’ve got to inform you properly.

    The residential tenancy office has lots of information on what constitutes proper notice. Make sure they follow proper procedure (don’t tell them the procedure, just file complaints with RTO if they fail to notify you properly– that’ll delay your eviction). And when they do manage to notify you properly, dispute it with the RTO claiming that their acceptance of 24 post-dated cheques (and statements about staying forever) constituted a fixed-term tenancy, or the expectation of a fixed-term tenancy.

    And if anybody says you’re being an asshole, say that you’re entitled to the full protection of the law– you’ve done nothing worse that trusting your landlord, and your landlord has betrayed your trust.

    Oh, and until the RTO rules on your case, DON’T LET THE LANDLORD HAND YOUR POST-DATED RENT CHEQUES BACK TO YOU. If you accept those cheques back into your hand, you’re accepting that the tenancy’s ending.

    Disclaimer: I am not a lawyer and this is not legal advice. This advice is worth what you paid for it.

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 3

    @jesse: Correct, often a mortgage debt shortfall won’t carry through bankruptcy. However, in the event of a strategic default, or if you have a healthy income, the court can still order you to enter into a repayment plan. Then you’re without the property, but you might still owe the shortfall (or some portion of the shortfall) to be paid over a period of years. The court will evaluate your income and expenses and make a decision.

    If you have a decent income, filing for bankruptcy isn’t necessarily a get-out-of-debt-free card.

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    I can’t get over how overly hyped these types of events are. Who falls for this and where do they think the money comes from to host?

    http://www.themetburnaby.com/video.php (click launch party)

    Hot debate. What do you think? Thumb up 8 Thumb down 2

    ScubaSteve Says:
    65

    Hot debate. What do you think? Thumb up 20 Thumb down 2

    FlipFlop Says:
    66

    At Anonymous:

    “tenancy agreement” means an agreement, whether written or oral , express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit;

    http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_02078_01

    I’d say that you have a case for arguing there’s a 24 month lease in place. I’d give you 80/20 against, but it’s better than just giving up.

    Hot debate. What do you think? Thumb up 16 Thumb down 0

    thanks ScubaSteve, your chart really puts into perspective how bearish sales are (even though they’re better than last month)…appreciate it!

    Like or Dislike: Thumb up 7 Thumb down 0

    ReadyToPop Says:
    68

    @ Brian

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

    Also some selective marketing according to the G man.

    Like or Dislike: Thumb up 1 Thumb down 0

    handing over post dated cheques in no way implies a lease….been there done that

    Hot debate. What do you think? Thumb up 7 Thumb down 4

    Anonymous Says:
    70

    @M-: Thanks for the advice, M- and others. She’s actually a very nice person and has left us alone for years except for offers to fix/improve the place and occasionally dropping off a pie. That being said we’ll make sure everyone follows the rules.

    Yes, it would be family moving in. She’s giving husband the boot, so he needs somewhere to live and our house was the first choice for various reasons. But they’d lose less money if he rented a condo instead of living in a whole house himself. I think they’re a bit screwed financially and are just thrashing around for solutions. Hopefully rational thought will return soon.

    It’s interesting to note that the main source of their problem (besides the personal issues) is the house they bought in 2010 with a bunch of equity they took out of the rental property we’re in. If they could sell/rent that to cover their costs they’d be fine, but they can’t.

    Hot debate. What do you think? Thumb up 15 Thumb down 3

    @Ted:

    High Society, Glamour, Violines and Acrobats… Über Kitsch for Vancouver’s New “Elite”.

    Like or Dislike: Thumb up 4 Thumb down 1

    @ScubaSteve:

    Listing numbers are down compare to 2010, 2011.

    Like or Dislike: Thumb up 0 Thumb down 1

    Bo Xilai Says:
    73

    @Ted:

    Launch party at the Met…

    Looks like what they were doing for Miami condos in 2007… Very good sign for Vancouver real estate bears… Consider it the breaking of the 7th seal from the Apocalypse.

    Well-loved. Like or Dislike: Thumb up 22 Thumb down 1

    Bo Xilai Says:
    74

    @Ted:

    Launch Party at the Met… Sorry it was Miami 2005…

    http://www.nytimes.com/2005/05/23/national/23condo.html?_r=2&pagewanted=all&

    Hot debate. What do you think? Thumb up 11 Thumb down 1

    More Data Please Says:
    75

    @vangrl: re: “… post dated cheques in no way implies a lease …”

    There is the well defined legal concept of oral agreement. A witness privy to the original offer to rent and the handing over of said cheques would be powerful evidence to appeal, for example, an early rental increase.

    http://www.cba.org/bc/public_media/credit/258.aspx

    The law also provides a 2 month owner use clause which can terminate the tenancy at any time for a VALID AND TRUTHFUL REASON under the Residential Tenancy Act. See definitions below.

    Per BC Residential Tenancy Act form RTB-32.

    REASONS FOR THIS 2 MONTH NOTICE TO END THE TENANCY (put an “x” in all the boxes that apply)
    The rental unit will be occupied by the landlord or the landlord’s spouse or a close family member (father, mother, or child) of the
    landlord or the landlord’s spouse
    A family corporation owns the rental unit and it will be occupied by an individual who owns, or whose close family members
    own, all the voting shares
    All of the conditions for sale of the rental unit have been satisfied and the purchaser has asked the landlord, in writing, to give
    this Notice because the purchaser or a close family member intends in good faith to occupy the rental unit
    The landlord has all necessary permits and approvals required by law to demolish the rental unit or repair the rental unit in a
    manner that requires the rental unit to be vacant
    The landlord intends to convert the residential property to strata lots or a not-for-profit housing cooperative
    The landlord intends to convert the rental unit for use by a caretaker, manager or superintendent of the residential property
    The landlord has all necessary permits and approvals required by law to convert the rental unit to a non-residential use
    The tenant no longer qualifies for the subsidized rental unit

    COMPENSATION FOR TENANTS
    On or before the effective date of this Notice, the landlord must pay the tenant an amount equal to one month’s rent payable under
    the tenancy agreement.
    If this Notice is ending a periodic tenancy, the tenant may withhold the last month’s rent instead of being paid compensation.
    Compensation is not owed to tenants who receive this Notice because they do not qualify for the subsidized rental unit.
    If a tenant has already paid the last month’s rent, the landlord must refund the rent as the compensation.
    If the landlord does not take steps toward the purpose for which this Notice was given or if the unit is not used for the stated purpose
    for at least 6 months beginning within a reasonable period after the effective date of this Notice, the landlord or purchaser must pay
    the tenant an additional amount equal to double the monthly rent paid under the tenancy agreement.
    If this is a periodic tenancy, a tenant who receives this Notice can give 10-days notice and move out early. The landlord must still
    pay the tenant one-month’s rent as compensation.

    Tenants in BC have well defined rights and very strong recourse. All tenants please take note of the RTO’s resources:

    Residential Tenancy Branch Office of Housing and Construction Standards Ministry of Energy and Mines
    Public Information Lines: 1-800-665-8779 (toll free) 604-660-1020 250-387-1602
    Website: http://www.rto.gov.bc.ca

    Hot debate. What do you think? Thumb up 12 Thumb down 3

    “The four projects could create an estimated 480 to 800 full-time mining jobs for Canadians.

    Canadians “just don’t have the experience” operating the equipment needed to safely extract coal in underground mines, said John Cavanagh, chief executive of Vancouver-based Canadian Dehua International Mines Group Inc., a company founded by China-born Vancouver businessman Naishun Liu.

    “Without the Chinese and the technology they’re bringing … these particular mines would not have been developed.”

    – snip –

    Stephen Hunt, western director for the United Steelworkers union, ridiculed Tuesday the suggestion Canadians couldn’t be trained to work underground.

    “Bullshit,” he said of Cavanagh’s assertions.

    “That’s just a cop-out, a way to bring in guest workers who are going to go into a camp, contribute virtually nothing to the economy, and then when they’re done they’ll be sent back to China,” he said.

    Citizenship and Immigration Canada spokeswoman Nancy Caron said the TFW program is employer-driven and usually requires that companies prove they are unable to find suitable Canadians to fill the job posts.”

    http://www.vancouversun.com/business/2035/Chinese+nationals+brought+fill+coal+miner+shortage/7365764/story.html

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 2

    left already Says:
    77

    Hot debate. What do you think? Thumb up 9 Thumb down 11

    How many seats will the B.C. Liberals (in-name only) still hold after the next election?

    Hot debate. What do you think? Thumb up 8 Thumb down 2

    @Anonymous: Sounds like a pyramid scheme.

    Like or Dislike: Thumb up 3 Thumb down 0

    Total days	22
    Days elapsed so far	15
    Weekends / holidays	7
    Days missing	0
    Days remaining	7
    7 Calendar Day Moving Average: Sales	81
    7 Calendar Day Moving Average: Listings	182
    SALES	
    Sales so far	1346
    Projection for rest of month (using 7day MA)	567
    Projected month end total	1913
    NEW LISTINGS	
    Listings so far	3306
    Projection for rest of month (using 7day MA)	1273
    Projected month end total	4579
    Sell-list so far	40.7%
    Projected month-end sell-list	41.8%
    MONTHS OF INVENTORY	
    Inventory as of October 22, 2012	18943
    Current MoI at this sales pace	9.90
    

    Monthly norms for October:

    year	sell	list	sell/list
    2001	2379	3086	77.1%
    2002	2866	3535	81.1%
    2003	3765	4200	89.6%
    2004	2735	3703	73.9%
    2005	3099	4041	76.7%
    2006	2722	4862	56.0%
    2007	3028	4819	62.8%
    2008	1364	4867	28.0%
    2009	3704	4977	74.4%
    2010	2337	3698	63.2%
    2011	2314	4364	53.0%
    Mean	2756	4196	65.7%
    median	2735	4200	74.1%
    

    Looks like sales be down around 1900. Listings above median, but not record-busting. But those sales are peeyoo stinky.

    Well-loved. Like or Dislike: Thumb up 34 Thumb down 0

    ScubaSteve Says:
    81

    @G:
    Listing numbers are down compare to 2010, 2011.

    Eventually people give up…

    Hot debate. What do you think? Thumb up 8 Thumb down 2

    @jesse: tell us more about this “bridge to nowhere”.

    Like or Dislike: Thumb up 5 Thumb down 0

    Sad news about my associate who recently bought a million bucks worth of real estate–the dream home if you will–only to lose the job he’s had for two decades within the year. Unfortunately, an extension of work didn’t work out and now the options are limited to finding a job in this city or sell and downsize. In my opinion, he had a top salary in a career that’s seeing diminishing returns. And he’s approaching 50. He must be going through hell but how can any “job” float a million bucks worth of real estate? We’ll have to wait and see. Maybe a government job will come around with six weeks holiday and a matching RRSP.

    Hot debate. What do you think? Thumb up 20 Thumb down 6

    Patiently Waiting Says:
    84

    @kenny: Think of what happened in 2001, when another party, the NDP, was reduced to two seats. Same kind of scenario.

    I think the only reason the Liberals are postponing the election is to make sure they (along with Harper) can sell our province’s resources off before they get the boot. It will be interesting to see what the NDP tries to do about it once they actually get elected. If Heyman winning the nomination says anything, they might take a hardline and we may enter into some real heated politics.

    Hot debate. What do you think? Thumb up 10 Thumb down 4

    Anonymous Says:
    85

    @Anonymous: Boohoo! So sad.

    Like or Dislike: Thumb up 2 Thumb down 4

    SunBlaster Says:
    86

    Can anyone confirm Genworth is 90% backed by government? They are a publicly funded after all, why would there be any gov backstopping?

    Like or Dislike: Thumb up 4 Thumb down 0

    painted turtle Says:
    87

    I could not understand how a piece of junk could be on the market for 1.2 million…

    Well, I know now: address is 888 W 19TH AV

    If a superstitious person is ready to let go several 100K for the triple 8, good for them ;)
    May be we could use this sale to test how many HAM are left in the market!

    Hot debate. What do you think? Thumb up 10 Thumb down 2

    @midnite toker1: Here is the (now) completed bridge. The infrastructure for the bridge was there for about 10 years previous, completed all the way to Kingsway from the mall, but for some reason the developer on the other side of the road, or the city, decided the bridge could not be completed. I forget the details — I’ve heard several versions of the story — but they built the thing and it stood there for a long time before someone rammed its completion through. I don’t know how often the bridge is used.

    But THIS time they’ll get it right I’m sure!

    Like or Dislike: Thumb up 6 Thumb down 2

    @SunBlaster: “Can anyone confirm Genworth is 90% backed by government? They are a publicly funded after all, why would there be any gov backstopping?”

    Private mortage insurers are 90% backed by the government. The government backs counterparty failure, not the loans. The way it works is if MIC or whoever goes bankrupt and can no longer service insurance claims, the government will transfer all insurance policies to its own books, another insurer, or CMHC’s, but only at 90% of par. That means that 10% of the value of the policies become uninsured.

    Say you’re a bank and have a $300K insurance policy on a mortgage with MIC. MIC folds and the government takes over the insurance policy. You now have a $270K policy. If the loan defaults you file a claim with the government and get $270K. You have to provision for $30K.

    Here’s why this is important, even today. Right now banks must insure high ratio loans through either CMHC (100% backed) or a private insurer (90% backed). If they insure privately they are not 100% hedged. That requires that they provision for counterparty risk (i.e. the private insurer defaulting), often by retaining capital, and that reduces the amount of capital they can lend out. Banks don’t like doing this so have alotted only a fraction of their loans to private insurers and lobbing the rest at fully-hedged CMHC MI. That avenue is potentially closing, then requiring all MI to have some means of counterparty provisioning.

    Why is this done? Well there are a few ways of doing this, in the US I believe MI is limited to a certain fraction of the loan, after which they will not cover any shortfall. Not sure what Australia does. In Canada they chose to insure the entire loan but backstop most of it. An insurer that is not backed by the government or has other stop-losses in place will still have counterparty risk and banks would need to provision for it. That’s the rationale, anyways.

    BTW this all falls apart when the government turns out to have its own counterparty risk. Under accounting rules the government is seen as a 100% perfect hedge. Failure of the “perfect” counterparty doesn’t look the case with Canada but, interestingly, that was a BFD in the late 1980s, when Canada might have had to start defaulting on its loans (in the various ways governments sneakily default) if it could not close its structural deficit.

    Hot debate. What do you think? Thumb up 11 Thumb down 2

    @Anonymous:

    Your situation may be totally different, but my landlady announced that she was selling our place last year, then I offered her more money and she changed her mind. It wasn’t a poly on her part. She just couldn’t make the numbers work out and had never thought about raising the rent. (She also refinanced, so as to lower her monthly payments.)

    It is possible that your landlady would find an arrangement other than selling to be better, if she was getting more rent. When you take the cost of moving and divide it by 12, its not an insignificant bump in the rent.

    Like or Dislike: Thumb up 5 Thumb down 0

    More Data Please Says:
    91

    @jesse: re: “…provision for counterparty risk (i.e. the private insurer defaulting), often by retaining capital, and that reduces the amount of capital they can lend out. Banks don’t like doing this…”

    Thank you for putting that part in. Because of fractional reserve lending, the 10% really bites banks hard. They would rather have CMHC insurance and lend the full 9x reserve multiple of that 10% money to a another customer.

    So yes, on the face of it the government backstops 90% of NHA loan counterparty default no matter what.

    However, the effect of the bank possibly losing that 10% is a risk, in effect, nearly equal to the entire loan value (9×10%=90%) in lendable capital!

    In contrast, CMHC’s 100% backing does not create the same incentive for prudent lending by the bank. Big difference.

    Like or Dislike: Thumb up 2 Thumb down 0

    Patient Renter Says:
    92

    @jesse: … bridge to nowhere …

    This is the one that goes across the parking lot, across the street, and into Best Buy? I always wondered what the hell it was for.

    Like or Dislike: Thumb up 3 Thumb down 0

    @More Data Please: “Because of fractional reserve lending, the 10% really bites banks hard.”

    They don’t need to 100% provision for the full 10%.

    Like or Dislike: Thumb up 2 Thumb down 0

    SunBlaster Says:
    94

    Thanks jesse that was very informative.

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    95

    @left already: “amazing pics…”

    Great to know that there are still good jobs out there.

    Like or Dislike: Thumb up 0 Thumb down 1

    So one presale sells out and everyone is talking about as if RE is making a comeback. What about all the other developments that haven’t sold out? mandarin in Richmond, my own townhouse complex in oakridge near the Canada line, and countless others.

    Like or Dislike: Thumb up 3 Thumb down 0

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