Vancouver Condo Info

From the ’sun predicted to set’ department of todays Province comes this article: BC developer warns of cooling condo market.

B.C.’s development industry must be nimble, disciplined and well-financed to survive the cooling of the provincial market, a veteran developer says.

The Lower Mainland has yet to experience the full impact of the U.S. housing slowdown and the troubles sweeping the Interior’s forest sector, Concert Properties president David Podmore said yesterday.

“I do think you’re going to see a continued slowing of our economy as . . . what’s happening in the Interior and the U.S. spill over,” Podmore told a conference on the future of B.C.’s housing industry.

“You’re going to have to really sharpen your skills to be successful and to compete effectively.”

Podmore said developers should stop relying on pre-sales, which he called a phenomenon of the past eight to 10 years.

The market is heading into a period where projects may take half-a-year to sell out, he said.

Disciplined developers will pull the plug on projects if it becomes clear they can’t succeed, he said.

There will be opportunities for well-financed developers to take over idled projects - but they must be fast on their feet, he said.

The ‘pulling of plugs’ has already started to happen on some projects like the Eden group Elyse.  Those that don’t pull the plug when they can get it pulled for them and go into recievership Sophia, H+H, Gardencity, etc.  There’s good news though, as the US housing slowdown continues it’s forecast that material prices will moderate.

The Bowra group has started sorting through which presales buyers are willing to pay more to keep their condo units:

Their options are to agree to pay a price that is 90 per cent of current market value for their units, which in some cases is more than $100,000 higher than initial pre-sale contract prices they signed in late 2005 and 2006, or take their deposits back and walk away.

British Columbia Supreme Court Judge Grant Burnyeat, last week, issued an order of foreclosure on the project for Bancorp Growth Mortgage Fund Ltd. and a second order authorizing receiver David Bowra to get the 85-per-cent complete development back into construction. That included offering pre-sale buyers the option to still claim their units, but at higher prices.

Buyers can take their deposits back if they want, but the order authorizes Bowra to cancel contracts and sell units at current market prices if necessary.

Developer Bill Eden turned the project over to receivership at the end of February when some $4 million in cost overruns threatened to sink the 81-unit development.

Previous related stories:

-Financing difficulty cancels Vancouver condo projects
-Eden group Sophia goes into receivership
-Receivers report for Eden Sophia
-2 more local condos run into financing problems.

Yet another BC condominium project has entered recievership, but this one isn’t in the lower mainland. The Willows in Lake Country, Okanagan has left about 78 pre-sales buyers waiting to find out what’s going to happen with this condo project thats currently near 75% complete. The developer in this case is Victoria based Divergent Environments and the receiver is BDO Dunwoody.

This year hasn’t started off with the greatest track record when it comes to pre-sales. Problems at the Willows makes at least five BC housing projects that have failed in the last few months. The Eden group canceled two projects in November and then saw the Sophia go into receivership last month. February also saw two Chandler Development projects, H+H Yaletown and Garden City in Richmond go into receivership and on Friday we got news that construction has been halted on the Abbotsford condo tower Brio.

The Eden Group is cancelling two local development projects citing difficulty getting financing and skyrocketing construction costs. The Elyse, a 119-suite condominium complex at 7th and Scotia Street in Vancouver had pre-sold 55 units, but letters are now going out and deposits will be returned.

“The industry itself — very difficult to get financing,” Eden said on Monday. “Basically, it’s extremely uncertain whether I can actually complete that building.”

Eden is also cancelling a $30 million townhouse development, with that site already up for sale. A Third Eden project at 11th and Sophia is currently under construction and will be completed as planned.

Hmmm.. Now why would it be difficult to obtain financing in a booming real estate market?

Full story on the CBC website

Anyone familiar with CB developments Riverbend pre-sale cancellation fiasco won’t be suprised by this news: the BC Financial Institutions Commission has ordered that extra warnings be placed on condominium pre-sale agreements to more fully disclose provisions in the contract relating to terminating, extending or assigning purchase agreements.

Buyers will be required to initial the cover page of disclosure statements to confirm the provisions were drawn to their attention.

Pertinent information must also appear in “conspicuous type” on the statement’s cover page.

The rules also provide for more disclosure of developers’ background, including:
– Their experience in the development industry.
– Whether they have been bankrupt in the past five years or been disciplined in the past 10 years for matters relating to real estate, mortgages of land, securities, theft or fraud.
– Whether any conflict of interest exists that could affect a buyer’s purchase decision.

Failure to comply with the disclosure requirements could result in the issuance of cease-marketing orders or “administrative penalties” of up to $50,000.