So who’s buying condos?

By now even the reader of the province know it’s a slow real estate market out there.  Not much is selling, sales to list ratio is low and prices are dropping.

..and yet, we still hear of new developments that have big opening day sales (where ‘opening day’ conveniently ignores months of marketing).

So who’s buying these new condos?

According to Bob Rennie it’s young people without any money:

Rennie Marketing registered 7,500 potential buyers before the sales launch, and he says the majority were under 28 years old. He believes it is the young demographic that is fuelling the sales of projects like the two he’s selling at Marine and Cambie. Part of MC2’s appeal is that because it’s not downtown (a 20-minute SkyTrain ride), the prices are lower. And pricing on more than half the homes was kept under $350,000, to appeal to the young demographic.

“So, we made the right decision bringing on both towers at MC2,” he reflects, sitting in a trendy coffee shop on Main Street. “We’ve released all the affordable product. There are 130 homes without parking so that we could get inventory under $300,000. We really did the research on the first-time buyer when we did Marine Gateway across the street, and 28 per cent of our buyers answered in an exit survey that they were receiving down payments from mom and dad, and grandparents.”

Full article in the Globe and Mail.

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Landbaron
Guest
Landbaron

Overheard on the Skytrain today:

“A 19 yr old friend of mine just got an inheritance from his grandparents. He’s using it to put a down payment on a presale while still living at his parents place. He figures he can flip it for a profit, or just move in once it’s built.”

Umm, I think he forgot about the mortgage etc. once completion hits.

Yikes!! is all I can say

Extend and Pretend
Guest
Extend and Pretend

@mac: Prefab construction.

I commented on the benefits of that construction technique just a few posts below yours with the same link!

Do you have further knowledge about it? I’ve seen prefab two story steel home kits that work quite well. Steel is more expensive than wood, but there is no cutting or nailing. The whole thing is screwed together very quickly and is very solid against high winds. Also, there is no creaking, warping, or imprecise walls/surfaces etc like a wood nailed building.

mac
Member
mac

@mac: Whoops! I see rp1 already posted that.

Neptune
Guest
Neptune

Rennie ” he says the majority were under 28 years old. He believes it is the young demographic that is fuelling the sales of projects”

Give me a break. The majority could have been young rich Asians. You only have to live in this City to know where the money is coming from. CHINA.

mac
Member
mac

How long until Vancouver’s building standards new low reaching for new heights a la China?

http://tinyurl.com/bete3gm

patriotz
Member

@HAM Solo:
” If you think the Tea Party was nutty, wait for the Maple Syrup party to take over.”

The Tea Party is really a reaction to the perception – which is turning out to be correct – that “minority” Americans are becoming the new majority. Their economic positions – if you can call their mass of contradictions positions – are just a fig leaf.

It’s also not a party at all but a wing of the Republicans. Our present day Conservatives have similar people, it’s just that Harper has the authority (which nobody in the US has) to keep a lid on them, most of the time.

patriotz
Member

@southseacompany:
“Boomers have money, they will give their children money.”

Every study I’ve seen says they don’t. What they have is the ability to borrow against their houses. For now.

Extend and Pretend
Guest
Extend and Pretend
@rp1: Instant Homes Their 30 story prefab 360 hour timelapse is here: http://gizmodo.com/5873962/amazing-timelapse-of-30+story-building-made-in-only-360-hours I wonder if they might be onto something. Some negatives could be the design lacks concrete foundation, parking garage, and maybe has acoustical isolation problems between floors? On the other hand it is cheap and responsive to market demand. If there was more competition in construction like this, supply would start to erode the demand price, wouldn’t it? Part of the problem in Vancouver are these ridiculously long approval and construction times. If it took weeks instead of years to bring new housing into the market, mortgage based speculators would be driven out. What I’d like to see is hundreds of buildings like that one springing up overnight as residential housing in Vancouver – so many that there would be two units for every man, woman, and… Read more »
southseacompany
Member
southseacompany

Rennie is focusing on the echo boomers as the next buyers. Boomers have money, they will give their children money. The echo boomers may not sustain the market and the prices we now have, but they are obviously the next in line to buy homes. So this is not much of a brainer. But it is interesting that he is shifting away from HAM as an ongoing source of buyers.

rp1
Guest
rp1

@gokou3: The government is on the hook for the whole damn housing bubble. The Conservatives are running ads: “can we *afford* Thomas Mulclair (NDP)” ? Where did they ask “can we *afford* the 600 billion dollar liability that sustained high house prices for a couple of extra years” ?

Girlbear
Guest
Girlbear

@rp1: Does this Chinese tallest building in the world not lend credence to the fact that no one “runs out of land”. As they say, the sky’s the limit”!

HAM Solo
Guest
HAM Solo

@ gokou

Wouldn’t it be ironic if Americans had medical care and ours went private.

gokou3
Guest
gokou3

@HAM Solo: What, you mean the government (us) cannot afford free medical care?

HAM Solo
Guest
HAM Solo
The only thing that is different here is that in the US, I don’t recall any American continually blathering on about it being different there, than previous real estate busts in, say, Japan. Once they gave up on “running out of land” and “real estate always goes up” they were pretty quick to start pointing in the mirror at their own stupidity. And once they began to trace the breadcrumbs back to Wall Street, they didn’t have to overcome some massive national myth about how conservatively financed or well-regulated Lehman Brothers was. The Canadian housing bust will be different in that it will crush the bogus elements of our so-called national identity. Those who define themselves as “not American” will find our housing bust extra-American. Those who coo about Canadian banking will maybe start being a bit more even-handed when… Read more »
Guy Smiley
Member
Guy Smiley

@ rp 1

Hahaha – there’s a pre-sale line up i want in on. What could possibly go wrong?

Yalie
Guest
Yalie

@Anonymous:

“Earlier this year, the Star reported a pattern of house flips and price jumps as much as 60 per cent in less than a day involving Hatcher. Most of the deals didn’t include deposits.”

For all the times we hear the bubble is not like the US it looks more and more the same every day.

Exactly. As mentioned before, this kind of mortgage fraud was rampant in the US during its bubble, and only became evident once prices crashed. Get ready for an epic deluge of similar stories on the CBC over the next couple of years.

The only reason we haven’t (yet) seen much of this in Canada is because prices are just beginning to fall. The main exception is Alberta, where prices peaked in 2007. Anyone recall the big mortgage fraud investigation in Calgary a couple years ago? Coincidence?

Anonymous
Guest
Anonymous

I too liked BPOM’s posts. I was going to suggest we all click our heels 3 times and yell “FUCKING SHITBALLZ” under the next full moon to see if we could conjure him back.

But, having just read the previous post i think NO#9000 is already filling in some of the lost commentary.

rp1
Guest
rp1

China to build world’s tallest skyscraper in 90 days: or your money back?
http://globaleconomicanalysis.blogspot.ca/2012/11/sky-city-china-to-build-worlds-tallest.html

After this they will drill to the center of the earth in a week and colonize the moon in time for supper.

I trust I don’t even need to mention the skyscraper index.

Naked Official #9000
Guest
Naked Official #9000

@GAM:

Comrade, chill the fuck out

No Noise
Guest
No Noise
@GAM I don’t have a lot of time to think about your link but I have read it (will spend more time on it later). To respond to what i think you are getting at I would just say – I am passing on important data on who is buying a certain sector of real estate at the moment – according to Colliers and the article.. I dont care whether they are Chinese – or local Chinese more specificallly as the article indicated – or Brazilian for that matter. Its just important info for folks interested in Van RE – whether its actually accurate or not is the real question. I suspect those on here smarter than I (and with more time!) will be chiming in shortly. BTW I personally think its a big mistake to be buying Van RE… Read more »
Anonymous
Guest
Anonymous

“Earlier this year, the Star reported a pattern of house flips and price jumps as much as 60 per cent in less than a day involving Hatcher. Most of the deals didn’t include deposits.”

For all the times we hear the bubble is not like the US it looks more and more the same every day. What ever happened to appraisals? Even automated ones can pick up a 60% increase in 1 day.

GAM
Guest
GAM
No Noise
Guest
No Noise

According to Colliers (biased of course) this report http://www.vancouversun.com/business/Transit+corridors+fuel+sustained+demand+condos/7574525/story.html
says that transit friendly developments are primarily being bought by (and marketed to) Chinese investors (locals from the sounds of it) either for income or for their kids – so the kids don’t need their own money I guess. It’s hard to stop the herd once they get moving but the cliff is quickly approaching..

Yup miss BPOM

cuic
Guest
cuic

“Sandler noted Hatcher family members bought a property at a price that, even on his own understanding, exceeded fair market value.”

Hatcher? that does not sound Chinese to me. those greedy, corrupt, Coach Bag buying, capitalist white folks. 🙂

anti-HAM
Guest
anti-HAM

@Patiently Waiting:

Those corrupt mainlanders driving up our real estate with their dirty money! They make me so mad!