Category Archives: presales

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.

Happy buyers don’t have regrets

Are we having fun yet?

If you’re ‘in the game’ you know that the real estate market in Vancouver has been a frothy pond of fun for years.  If you don’t count transaction and renovation costs it’s easy to get rich flipping condos.

Or if you want to get more meta just resell presales contracts.

That’s right, we have people here who will buy the right to buy a building that doesn’t exist yet!

The funny thing about easy money is that it seems so unreal. This city is filled with people who could easily cash out even at current post peak prices and have a big chunk of real money, but will the majority do that?

Nope. The majority will stay put, renovate, buy back into the same market or turn their home equity into more debt via a HELOC.

In fact the majority couldn’t all cash out even if they wanted, we simply don’t have the buyers to enable that. Even when we had bidding wars we didn’t have enough buyers for a majority to cash out and now that sales have plummeted we really don’t have enough buyers.

A few lucky sellers will cash out and make money off this bubble. Likely because life changes caused them to move on. The majority will keep on paying their mortgages or get foreclosed on. Recent buyers will be paying more to keep their homes and may start to feel a bit trapped.

You saw this here just a couple years ago when buyers were complaining that developers were selling condos in their building for less than they paid and developers were suing presales buyers for money to cover the difference between their deposit and the lower resales value.

But you know what? They’ll be fine, they payed the price they felt their home was worth to them. A market decline doesn’t hurt someone that is happy with the price they payed and can keep paying their bills.

And if rates go up or job losses occur? Well someone without a financial buffer and emergency savings to deal with such a scenario really wasn’t ready to buy a house in the first place.

Village starts to dig itself out of hole

Good news! Now that shops and restaurants have opened up in the former Millennium Water Olympic Village housing development it’s no longer the creepy ghost town in the middle of the city!

Not only are there signs of life down there, the city actually looks like they’re starting to shrink the big ball of debts they acquired when they took responsibility for the project.

This progress is hard won and comes thanks to a number of efforts including:

-The city lowered property tax for businesses
-In February 2011 prices were dropped 30%
-In August an additional $5k in incentives offered to buyers

The city isn’t saying how much they still owe on the village, but the debt at the end of 2011 was $462 million.  Most of the extra expenses are from repairs for building deficiencies and marketing costs.

It looks like there is now just over 25% of the condo stock that remains unsold, but the receiver has put a block of rental units up for sale.  The buyer will be required to maintain those units as rentals for 20 years.

“The purpose and benefit of the sale of the rental buildings is to generate cash to repay the loan payable to the secured lender [the City of Vancouver],” said a statement from Ernst & Young. “It is particularly advantageous to undertake such now while interest rates remain low, the rental buildings at The Village on False Creek are fully leased and there remains an active pool of potential and interested buyers.”

The receiver also got permission from the court to put the project into bankruptcy, if needed, a move that it says is not being contemplated right now but “gives … the flexibility to consider the option of generating value from SEFC’s operating tax losses.”

Read the full article in the Globe and Mail.

Lots of new condos coming

They aren’t making any more land, but they are making more condos.  Lots more condos.

Real estate market team MPC Intelligence started tracking new condo projects in Vancouver in 2005.

They just recorded the busiest six months on record for announced new concrete condo projects.

This despite a recent slow down in the presales market.

A new wave of projects is expected in the fall.

Hancock said the pace of pre-sales has slowed in the last two months, but he expects a “large wave” of new launches in the fall.

Hancock attributes the slowdown to developers postponing projects because of market conditions, and some projects being delayed in the approvals process.

He said projects priced right and in the right location — near rapid transit — are doing well, citing strong sales at the Solo District condo project in Burnaby that started pre-sales this past weekend.

Hancock noted that 55 per cent of the concrete condos introduced to the market this year have been sold, with most sales in the first quarter and “the second quarter showing slower uptake.”

He also said it’s “too early to tell” if the slowing resale market is a factor in developers delaying projects.

The presales market can’t be doing too bad when we have big projects like Marine Gateway selling out in 4 hours.  The odd thing is some people are reporting seeing bus ads for this development.

Why spend money advertising something that isn’t for sale anymore? Can anyone confirm these ads?

The good news is they have a plan to deal with the smell.

 

 

TD: Toronto & Vancouver face 15% decline

It seems like one of these bank economist forecasts come out every week, but TD is calling for a 15% decline in house prices here and in Toronto over the next couple of years.

“There have been growing signs that the markets have been tilting towards excess supply of new multiples,” the bank said.

Indeed, condo prices in both cities have shown signs of slowing down much more than the price of single-family homes, the usual benchmark of a market’s overall health.

“In fact, looking at the trend in condo prices, you can see there has been essentially no increase in prices since the federal government first began tightening mortgage rules in mid-2008,” the economists said.

So if the average selling price on a Vancouver single family home is already down 12% year over year and the outlook for condos looks worse… maybe not the best time to buy a presale condo eh?