Vancouver Secrets

Putting on the Ritz

Construction was halted on Vancouver’s premier property yesterday…

Advertising signage around the site was missing and construction trailers had been removed from the site.

Bob Rennie, who markets the project, said 50 per cent of the condominium units were pre-sold.

“I’ve just been instructed by Holborn (building’s developer) to make it clear that it is a suspension of construction until they go through redesign,” Rennie said Tuesday.

This makes it the tenth development canceled lately, causing a wee bit of concern in Vancouver’s booming high rise development.

But, as we all know, the Olympics are coming. Prices for condos should continue to rise.

Get out and buy before it’s too late.

(Ritz homes are priced from $2.5 - $10 million. Penthouse pricing available upon request)

Real Estate Bubble - Vancouver Style

Anyone questioning that Vancouver has reached the end of the bubble only needs to see what you can get for your money…

Here’s a sampling.

1) Nice area - you’ll need the mortgage helper:

An excellent Point Grey property with exceptional streetscape. Located in a family oriented neighbourhood, this home has 5 bedrooms, 3 baths & an extremely open layout. Bsmt is the perfect mortgage helper. Close to UBC & great shops.

$1,068,000.00

2) The only house under 800K on the west side.

This is a great opportunity to live in a very special part of Kitsilano. A quiet & cozy spot yet close to everything - Great shopping, restaurants, coffee bars, The Hollywood Theatre, beach. Lovely lush garden. 54 x 40 corner lot. Darling little handyman’s special is waiting for your special TLC & decorating ideas. This is the least expensive house in Kitsilano.

2 bedrooms/1600 square feet. $799,000

3) Let’s try the east side..

Just off the Trans-Canada… might need some work.

Sit on your deck and enjoy a 260 degree view of Vancouver and its spectacular sunsets. Long time owner. Home not liveable & building lot only with unobstructed, permanent view on corner lot.

So if you’re in the market for a new home, you may want to wait for just a little bit.

Vancouver Leads the Country

photo credit: labanex

Vancouver leads the real estate trend and dragged the average price of an existing home in Canada lower last month.

The August sales numbers from the Canadian Real Estate Association (CREA) show 3 consecutive monthly drops in existing-home prices. This will be the largest decline in more than nine years.

Sales fell by 53.4 per cent in greater Vancouver in August compared with the year before, and average prices dropped by 4 per cent for both detached homes and condo units, to $737,985 and $374,366, respectively.

This is following July’s overall housing unit sales drop of 44 per cent.

According to Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., the cooling of the Vancouver market is the most “disturbing” figure in a series of recently released housing data, including national new-home prices, building permit applications and housing starts.

“The drop was pretty serious, especially coming on the back of a big sales drop there the month before. When you’ve got sales for your most expensive city falling like that, that’s going to knock the stuffing out of the national average,” he said. “The other [economic] data was a little better than expected, but it can be choppy from month to month, and continues to show the market is cooling.”

The market here in Vancouver is still ridiculously high - but there’s hope for those of us waiting for this correction to play out.

I am betting prices will be down at least 20% by next spring.

Look on the bright side…

photo credit: 96dpi

Canada’s economic outlook downgraded

The OECD has cut Canadian growth forecasts and now predict growth of less than 1 percent for the year:

Canada’s economy will expand by just 0.8 per cent in 2008, down from the 1.2 per cent forecast last spring, the Organization for Economic Cooperation and Development projected in a revised economic outlook Tuesday. That’s also less than the 1.1 per cent now projected by the Finance Department.

The U.S. economy, however, will expand by 1.8 per cent, up from the 1.2 per cent projected in the spring, and the G7 countries will grow on average by 1.4 per cent, unchanged from the spring projection.

The only G7 country that will post weaker growth than Canada is Italy, now projected to expand by 0.1 per cent.

Big drop in Lower Mainland home sales

‘This summer, sales went off a cliff,’ says urban economist
Derrick Penner, Vancouver Sun

The turn of the Lower Mainland real estate market’s cycle has been more dramatic than expected with real estate boards reporting another drop in sales and slide in prices at the end of August.

In Greater Vancouver, August Multiple Listing Service sales were down almost 54 per cent to 1,568 units, compared with 3,348 units in the same month a year ago.

Lower oil, home prices and pressure on retail prices… all the things that may let Vancouver fall back in line with the rest of the country.

Now’s the time to start putting away cash, and this time next year there may be real deals out there.

Good thing the Olympics are almost here to save the day.

Don’t Buy A Strata In Vancouver

photo credit: penmachine

If you decide to buy (?) think twice of the property is a strata. A strata is basically a political board - and we all know how politics work in BC.

Some of the fun things you’ll get if you do buy a strata include:

* There’s no source of legislation interpretation to let you in on the operation of strata corporations according to law (search Google and let me know if you find anything),
* They do not need to inform owners and purchasers of the financial implications of the condition of common property,
* No need for an audit of strata finances even where the strata corporation has hundreds of thousands of dollars in a reserve fund, and
* The lack of prosecution of developers operating contrary to strata legislation.

In other words, the strata typically becomes a group of self-serving busy bodies, with the ability to harass, ignoring problems with common areas, and getting away with it.

The lack of audited financial leaves the system wide open for misappropriation of funds.

A neighbor of mine has been fighting with his strata for over a year, as they will not fix the exterior of his condo. They won’t let him do it himself and have made his life hell. His property has taken a hit and he has nowhere to turn.

His only option is to sue, and the cost is very high. And the strata board knows it.

Look out for buildings where there are foreign investors also. They won’t vote or participate in the strata’s decisions. This can create a lot of problems.

The “leaky condos” mess should have brought radical changes to stratas, but I guess legislators were too busy passing lifestyle laws and finding new sneaky ways to tax us, to really care about condo owners financial security.

How A Politician Can Help Bring Down A Bank

From the Wall Street Journal:

The director of the Office of Thrift Supervision, John Reich, blamed IndyMac’s failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank’s solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion.

Mr. Reich said Sen. Schumer gave the bank a “heart attack.”

“Would the institution have failed without the deposit run?” Mr. Reich asked reporters. “We’ll never know the answer to that question.”

photo credit: yanec

This demonstrates how one voice, or dumb politician, can start a stampede when it comes to banking or real estate. IndyMac Bank suffered one of the biggest bank closures in US history.

In Vancouver the media works in harmony to turn bad news into good. Especially when it comes to real estate. As they get a lot of their profit from real estate ads, so don’t hold your breath you’ll get any warning until after the spiral begins.

The announcement of a tightening on 40 year mortgages is a good sign there is trouble ahead. The Bank of Montreal said on Friday that it will stop offering 40-year mortgages… 3 months ahead of the rule change. Considering that 63% of home buyers take these mortgages, just to be able to afford the payments, it will have an immediate impact on home sales and prices.

Say good-bye to liar loans (no proof of a borrower’s ability to repay) and hello to a max of 45% for a borrower’s debt-service ratio.

This is not good news in Vancouver, where people fork over 70% of their income for the privilege of living in a “hot” housing market.