Sunshine coasts largest developer files for Bankruptcy

Last week over at VancouverPeak Skook posted about the bankruptcy filing of Wakefield Construction.

We missed that posting here at VancouverCondo.info, but it’s got some interesting details about the impact to the economy and a number of subcontractors on the sunshine coast, Vancouver, Whistler and Bowen Island.

There are no winners in this situation – not the employees, not the subcontractors, not the local businesses nor suppliers, not the community and not Lance Sparling. As the list of “Unsecured” creditors shows, he borrowed from himself, too, to keep the ball rolling. His waterfront home was put on the market a year ago and remains unsold despite a -25% drop in the list price; but, as we know those million dollar plus properties have been slow to move on the Sunshine Coast – only 17 sold in 2014 out of a total of 123 listed – that’s barely 14%.

Skook also relates a personal memory:

Like so many others living in and north of Sechelt I wondered what would replace the old “Wake-in-the-Field” Inn and then was fascinated by those uniquely curved roofs of that replacement – the Wakefield Beach development. When I moved down to Sechelt, I had the opportunity to walk through the project and it is a very special and attractive development. The company, Wakefield Construction, was born from that development and at least in this instance the company name lives on.

While Skooks posting is almost nostalgic in tone, the first major media to pick up this story is Business in Vancouver. In their story the Realtor is surprised:

“They ruled the world up here,” said Sechelt realtor Susanne Jorgenson,” “I don’t know how they could have failed.”

..The chamber of commerce is shocked:

“I was shocked,” said Kim Darwin, president of the Sechelt and District Chamber of Commerce. “[The Coast] has a number of new construction projects coming up, so I hope our smaller contractors can step up.”

And the customer is angry:

“They screwed a lot of people,” said Brad Copping, general manager of South Coast Ford Sales Ltd., which had hired Wakefield Construction to complete a 9,000-square-foot addition to its Sechelt dealership. Copping is now paying three of the former Wakefield employees to continue work that is now half complete.

“This will cost a couple of hundred thousand dollars,” said Copping, whose company is not on the creditor list. “They [Wakefield Construction] over billed us and then didn’t pay their sub-contractors. So we are paying twice for the same work.”

Read the full article over at Business In Vancouver.

 

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VMD
Member

Toronto Builder quietly cancels condo complex
Kingsclub becomes second condo project in last few weeks to suddenly convert to rental apartments, leaving more than 100 preconstruction buyers out in the cold.

“These two cancellations are “a warning to all pre-construction condo buyers out there that this can happen and to read your contracts carefully,” said realtor Andrew la Fleur.”

Whistler or bust?
Guest
Whistler or bust?
#76 – The BOC wants a lower dollar. There is a currency war going on and its a race to the bottom. The Euro, the Aussie $, the C$ are all trying to juice their exports and economy by actively depreciating their dollar. The big losers are the Swiss and the US$ and other strong economies. (Before you say the US is not a strong economy they created 3 million jobs last year and anyone who wants to work can) The BOC will not be intervening and if they do it will be with foreign currency reserves not with rates. We are in for low rates for a very long time. Everyone needs to prepare for the new normal. That said, each cut has less and less of an effect and the RE market has been juiced as much as… Read more »
history
Guest
history

do we have the makings of a Fibonacci curve?

Bear Mountain
League
Wakefield

fib build is like this

* (Bear mtn)
* (League)
** (Wakefield, _________)
***
*****
********
*************
*********************

@#55
Guest
@#55

#58 bullwhip29 Says:
January 28th, 2015 at 2:44 pm
@ #55
i’m surprised BIV actually picked up on this story (they also publish RE Weekly). how much do you want to bet you won’t hear a peep about this from other MSM outlets like global tv (who was all over the 15bp rate cut by the banks and the BOC announcement from last wk like a dirty whore). its funny, many ppl i’ve talked to had no idea of the problems at bear mountain (among others)
…………………………
Any new development at Bear Mountain?
plots a Langford are asking less.

No Bid
Guest
No Bid

“They ruled the world up here,” said Sechelt realtor Susanne Jorgenson,” “I don’t know how they could have failed.”

It is called leverage and illiquidity. Real estate is both illiquid and highly leveraged. One hiccup in the market and things blow up for those who seem to be ruling the world. There will be further waves felt from this bankruptcy still to come. More failures, more properties in foreclosure and more pain for those who are illiquid and highly leveraged.

No Bid
Guest
No Bid
From the previous thread: “This is what the bears refuse/can’t comprehend: We live in a global environment where $1 Million is nothing.” Actually a recent study showed you need $798K US total clear assets to be in the top 1% in the world. More than 99% of the world population could not come up with $1 million if they liquidated all assets. Almost 40% of that 1% live in the US (18 million people). Only 1.6 million live in China and 1.6 million in Canada. Of course almost all of those in both China and Canada that have $798K have most of it tied up in real estate and could not access the $798K to buy more real estate. For that fraction of 1 percent in the world that could come up with $1 million most have ties to other… Read more »
Yunak
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Yunak
VMD
Member
Former BoC governor warns new regulation could trim bank profits Aww…poor banks.. “Canada is being dragged into “overzealous” financial regulation by a global campaign to root out risky bank lending practices, former Bank of Canada governor David Dodge argues in a new report. Meeting tighter new capital, liquidity and leverage rules could cut bank pretax profits by as much as 20 per cent, Mr. Dodge warned in a report being released Thursday by the C.D. Howe Institute.” “Inefficient and overly precise “American-style” regulation will “cabin, crib and confine” Canadian financial institutions, according to Mr. Dodge. The new rules have been pushed on Canada by the international Financial Stability Board, an association of regulators that advises G-20 countries, and have been gradually tightened since the financial crisis, with more changes to come by 2019. The FSB is chaired by Bank of… Read more »
patriotz
Member

@1: ” leaving more than 100 preconstruction buyers out in the cold. ”

Melodramatic headline. The story indicates they will be getting their deposits back.

Pre-sale buyers should think about why the project is being cancelled in the first place – the developers are anticipating a drop in prices. A drop in prices or inability to finance does not relieve pre-sale buyers of their obligation to complete, and they will be sued if they don’t.

88
Guest
88

Beijing smog makes city unliveable, says mayor

http://www.theguardian.com/world/2015/jan/28/beijing-smog-unliveable-mayor-wang-anshun-china

what is a wealthy chinese to do? must find a more livable city…

VANCOUVER NAMED ONE OF THE WORLD’S MOST LIVEABLE CITIES

bullwhip29
Guest
bullwhip29

@ #4
no nothing new really. only suggesting many island residents were completely unaware of what happened there. prices have certainly been in a funk for while though (ie. several yrs)

Marco
Guest
Marco

#10 @88

Beijing residence do move around their own country too. They don’t all pack up and leave to foreign lands.

“Reason to go south
Appealing to them are companies such as Meizu, a manufacturer of mobile phone handsets based in the southern seaside town of Zhuhai.

Two months ago, the firm launched a “Blue Sky Recruitment” campaign in Beijing, placing ads in business tower block elevators around the city to tempt young IT engineers into moving south.”

Cheers.

bullwhip29
Guest
bullwhip29

plenty of HAM stock portfolios getting clocks cleaned on BABA in last couple of days. i personally know several that have serious money tied up in this stock and just took low to mid 6-figure hits in the last 48 hrs. i’m also sure some will just things worse by averaging down at the lucky price of 88.88

bullwhip29
Guest
bullwhip29
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

more and more countries in europe are implementing negative savings rates. i wonder if they’ll come here. renting and saving the difference isn’t as attractive. unfortunately since so many people are priced out they will be buying in aldergrove.

bullwhip29
Guest
bullwhip29
southseacompany
Member
southseacompany

“Oil crash bad news for B.C. labourers abroad” 24 Hours

http://vancouver.24hrs.ca/2015/01/26/oil-crash-bad-news-for-bc-labourers-abroad

“Mark Thompson, University of B.C. Sauder School of Business professor, said the oil crash and potential job loss will have an impact on the province’s unemployment rate “It’s going to depress the labour market here.””

Simon
Guest
Simon

“Wealthy Asians Seek Refuge in U.S. Dollar During Currency Turmoil”

http://www.bloomberg.com/news/articles/2015-01-28/asia-s-rich-chase-dollar-rally-as-volatility-haven-currencies

Wait…. What? I thought wealthy Asians sought refuge in Vancouver RE while the Canadian dollar drops to 6 year lows…

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

>Wait…. What? I thought wealthy Asians sought refuge in Vancouver RE while the Canadian dollar drops to 6 year lows…

wealthy chinese are having economic impact almost everywhere in the world. except in vancouver… we are different… no HAM here… we are the most un-chinese city in north america, right guys?

https://www.youtube.com/watch?v=ZOve5PhsT8I

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@17

many people in vancouver have no idea how many british columbians work in the oil sands (because many people in vancouver are clueless ontario transplants). in the interior, the north, whenever people get together the conversation is who is in fort mac and who is back.

this will have a big impact on the economy of this province.

take time to get to know regions outside of the lower mainland. one day you may find that you are forced to live in one of them.

space889
Guest
space889

@No Bid – Most people don’t buy houses with cash, they borrow to buy which means it is more about income than wealth.

space889
Guest
space889

@patriotz – So why is the developer cancelling if the pre-buyer are on the hook anyways? Maybe, just maybe, developers can make more $$$ doing rentals rather than selling? So it is a pure profit motive?

The constructions on the projects have already started so construction financing is not an issue in this case. Especially since with rentals, there are no pre-sales period! Yet they got the money to build. so I doubt it’s inability to sell or condo market cooling. More likely, the developer got offers it can refuse from some institutional investors looking for stable income over long periods of time (*cough* pension funds *cough*).

space889
Guest
space889
@Bull! Bull! Bull! – Bears don’t believe interest rates can drop ever and if rates do drop then it’s all BoC and Gov’t fault!! They don’t play fair! They wouldn’t let house price drop so we can vulch and buy and laugh at all the existing homeowners as they go bankrupt! They are so mean! Seriously, US sovereign 10yr yields is like 3 to 8 times higher than 10yr yields for French, German, or even Italy & Spain’s 10yr sovereign yield. This is the USA, the ultimate safe heaven for investors. So yeah, rate can potentially go A LOT lower. Frankly at this point, I wouldn’t be surprised if BoC starts on a QE program next year and we have 5yr mortgage at 1.25% with 0.5% 5 year GIC rate. I’m sure bears like MortgageSlave will just cry even more… Read more »
vangrl
Member
vangrl
the argument that the Chinese are just parking their money in a safer place and that the ‘up to 25%’ they’ve lost in currency exchange means nothing to them is crazy! Have you guys actually sat at a Pai Gow table? Chinese more than any race (that I’ve witnessed) hate losing money, like HATE IT. Not to mention that they are insanely superstitious, they will only play at certain tables, sit in certain seats, play with certain dealers, pile their chips in a certain way etc…. One can only hope that they start regarding Vancouver as a bad omen and take their chips elsewhere. Sorry if some feel this is racist, it’s not my intention, it just feels to me that Vancouver has done their fair share of “hiding their money” & that it’s time other places started feeling the… Read more »
space889
Guest
space889

@bullwhip29 – but, but, but, but I thought investors can always sell in 3 seconds and get their $$ back in 3 days, unlike illiquid house and hence will never not suffer big losses in stocks and bonds?!?!

Oh I forgot, the BABA investors aren’t bears on this blog and they are all stupid locusts…..yeah, that’s must be it.

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