Varsity condo project cancelled, deposits returned

The Varsity theater in Point Grey village was set to be knocked down to make way for condos. Apparently the land was too valuable to waste on a single screen neighborhood theater.

Unfortunately it looks like now construction costs have made the land too valuable for the condo’s that were to be built in the Varsity theaters place. Deposits for Varsity condo’s have been returned citing “The unprecedented rise in construction costs” in Vancouver.

So what will go it its place? We’ll have to wait and see.

CMHC will insure ‘interest only’ mortgages.

Worried about the RE market in vancouver slowing before you can sell your most recent leaky condo flip?

Looks like you can breath a sigh of relief.

The Canada Mortgage and Housing Corp. has just announced that they will offer mortgage insurance to interest only loans. This means that new buyers can stretch even further in hopes the market will continue to rise at a meteoric rate. Interest only loans enable the purchaser to pay only the interest on the loan for up to 10 years. This means you can buy and sell property without even touching any of the principal, just pay the rent on the money!

Monthly payments are therefore lower to begin with, giving buyers a way into high-priced markets, but rise as principal is added — even more so if interest rates also rise.

Interest-only loans have been all the rage in the United States in recent years, amounting to up to 20% of all originations and up to 50% in some of the hottest U.S. cities. Mr. Tal said the last time they were so popular in the United States was in 1929.

“In the past, they were given to the selected few, people who say paying principal is for losers and what I want to do is save the money and invest it more productively in the stock market,” Mr. Tal said. Today, in the United States interest-only loans are more widely available, even for sub-prime, high-risk borrowers.

“So if in the past the motivation was to invest the money more productively, today the motivation is to afford the unaffordable,” Mr. Tal said.

That oughta squeeze a bit more out of this market! Article in the National Post.

Condos, crime and calling it quits.

Are you bored of sifting though the MLS looking for condo bargains to flip? Do you ever wish the condo market in Vancouver was a bit more like a television court-room drama with charismatic con-men and lavish life styles? Anyone who thinks that the real-estate market in the lower mainland is lacking in excitement or colourful characters ought to check out this article in todays Vancouver Sun.

A partnership between two men with checkered business backgrounds who are developing several high-profile condo projects in downtown Vancouver, Surrey and Richmond has dissolved in acrimony and litigation.

One of the partners, George Dengin, has sued the other, Mark Chandler, in B.C. Supreme Court for allegedly misrepresenting the status of the projects and failing to account for the sale of dozens of units.

Dengin’s lawsuit is supported by an affidavit filed by Vancouver real estate marketing whiz Bob Rennie, who introduced Dengin to Chandler in 2003 and was subsequently hired by the partnership to sell the projects.

The Partnership of Dengin & Chandler was responsible for the following properties:

  • Hamlin Mews, a 21-unit townhouse project at 37th and Oak;
  • Tribeca, a 52-unit condo project at Richards and Nelson;
  • H+H, a 22-story condo tower at Homer and Helmcken;
  • Anndale, a shopping centre on a 16-acre property in Surrey;
  • Richards Street, various lots including the present site of Richards on Richards nightclub;
  • Eldorado, the present site of the Eldorado Hotel on Kingsway;
  • Garden City, two mixed-use towers in Richmond.

Incidentally Bob Rennie is supporting the partner that had his stockbroker license revoked for serious trading infractions in 1987, NOT the partner that was indicted in Arizona on 13 charges of fraud, theft and forgery in 2000.

The importance of "balls" in the Vancouver RE Market.

OK, so you look around and start to see ‘warning signs’ about the Vancouver Real Estate Market.. You know, things like interest rates going up or the fact that purchasing prices are up to three times the rental value of some condos, townhouses and apartments in Vancouver… And you start to worry riiiight? You start to think “but what if Vancouver realestate isn’t worth what its selling for right now?” or “what if the market is dangerously overheated and could be knocked down in a ‘market correction’ that could see my home value drop by thousands of dollars?”

You’re looking at home values dropping in some places in the states and warning signs that the US is headed into a recession and you’re worried that we might follow suit?

eh. easy come easy go I say.

But if you’re really freaked out and you want some sort of advice or encouragement?

I say balls to you.

Seriously. Get some balls, they will help you through any troubled times the may or may not lay ahead. You know those little stress balls? One for each hand, no problem – get a little worried just squeeze those fears away.

What happens if the bubble pops?

Over on the Vancouver Housing Market Blog there’s an interesting historical discussion of 1981. That was the year when real estate prices in Vancouver fell by about 50% after a fast strong run up in prices. There were a few factors that caused that crash, but ‘this time its different’. As long as we keep bidding up the price of Condos in Vancouver we’ll all be fine.

But just for the sake of argument, lets say the real estate market in vancouver crashes in the next year or two.. what would that mean? Well for one thing houses and condos would be worth a lot less. This could be depressing to current owners, but not the end of the world. If you can afford your bills you stay put right? Eventually prices will go back up, you’ll just be paying some premium rent on the money you used to buy your place. As long as you don’t have to move you don’t have to worry about the fact that you cant sell your place.

If things get really bad? Well, I guess in the worst case scenario that would be unemployment and foreclosure right? Buy why get all negative? Even in that gloomy scene you can look at the bright side. Its all a matter of perspective – Vancouver has one of the mildest climates in Canada, people come all the way from Quebec to live on our streets. We have lots of prime real-estate in parks and tarps are cheap! So lets stay positive! I’m off to view this 500 sq. foot condo on east side right now – the MLS listing says I can “just paint and profit!”.