All I can say is "build them houses" and "build those condos" to all the developers out there. Give us the biggest supply overhang in history so we have lots of choice and you have to compete for the few actual homebuyers there are out here.
I'm not including those speculators as an "actual" homebuyer and I am hearing more and more stories of developments finishing but nobody is moving in. These developments are sold out but up to 50% of the buyers were speculators and are hoping to now flip their presale townhouse or condo - you can see their asking / wishing prices on the MLS. Ironically, these speculators are now competing with the developer in many cases to sell the units in the complexes they are in.
Mohican says - bring on the supply. Use the comments to tell us about your anecdotes of speculators gone wild.
13 comments:
I have heard of several stories in my area where the city doesn't initiate garbage pickup until there is at least 50% occupancy. The complex is complete but nobody is living in it yet so no services.
Several units are on MLS, some more are for rent, and the developer is still holding onto a couple. The remainder are either occupied or vacant and waiting. This complex in particular is next to about 15 other similar complexes and it appears as if they are all in similar situations.
Some specuvestors are dreaming with their demands for rent - in the WTF category is http://vancouver.craigslist.org/apa/377701581.html $1800 for a 1/2 duplex in Cloverdale - are you kidding!?!
The inflating of the rental market by specuvestors is driving me crazy!!! 800sq feet in Coquitlam for $1450, a 2 bed suite is Port Moody for $1800?!! Maybe if it was downtown... but these prices in the suburbs are ridiculous.
The rental asking prices on craigslist don't reflect reality. I don't believe that any of those people asking $1500 for a 1 bedroom are actually getting the money.
I recently moved to a good area on Vancouver's West Side and am paying $860/month for a large one bedroom apt.
Hey check this out from Digg. They guy uses Craigslist to produce a heat map of rental costs for various types of rentals and overlays it on a google map of San Francisco.
http://mullinslab2.ucsf.edu/craigstats/
mohican,
Are you sure about that garbage story? Labour strife aside, why the hell should I pay full taxes for half services?
When does CMHC consider a building "started"?. Is this the month that it is approved by the city, or ground is broken? No permits are being handed out while the city unions are striking.. better buy soon because they aren't building anything!!
There have been some recent rants on blogs regarding high rental prices, slumlords, etc. I agree that craigslist is not reality. Specuvestors are pricing backwards (using their own affordability), not pricing according to the market. I'm sure a few suckers out there (maybe new to the city) are paying some of these high prices, just enough to string along these inexperienced landlords.
Here is a link to a guy who straightens out the dreamers about what is reasonable for Vancouver rents:
Nicholas Meyer
Dreamers on Craigslist will have to capitulate when the condo oversupply sweeps their over market rents right off joe average's radar.
The Craigslist rents are pretty amazing, but even other rental websites show the cheapest things out there are going for $1200 a month - this is for a one bedroom by Hastings & Nanaimo as I recall.
I understand the vacancy rate is around less than one percent though, so who knows, maybe they can get that.
I've seen some of the dumps advertised on Craigslist, but people will pay crazy amounts to live in DT. There is a huge market for ESL students in this town. The downside is the turnover is every 4-6 months, but the upside is that they are willing to pay up to $3,000 for a one bedroom. The problem is one guy rents the suite, then they pack four people into the apartment, so maintenance is an issue.
As for stories about wild open houses (see moderator's comments), I went to an open a couple of weeks back for a 1 bedroom in DT and there were 53 (I counted) people there, including a realtor taking cell phone pictures and talking in Korean to his client. I found out later he bought the place for 26k over ask.
I don't see an end to this insane market anytime soon, but when it crashes, I suspect it will be fast and ugly.
warren - I am certain about the garbage collection issue. The City of Surrey has a rule that a new development must be at least 50% occupied before they initiate garbage collection. The developer is taking the responsibility until that time.
mohican,
How does the city calculate occupied? If they've issued the permit, I can't imagine they come back to check up on things.
warren said - "How does the city calculate occupied? If they've issued the permit, I can't imagine they come back to check up on things."
When the new owner actually settles accounts with the developer and the notary / lawyer does all of the conveyancing / paperwork the title officially changes hands and the new owner is deemed to "occupy" the unit and thus is liable for the property taxes from that point on. The lawyer files paperwork with the city at that point to register all of the appropriate titles, etc.
That is my understanding.
The Canada-U.S. housing divide
Check out all the "it's different here" arguments in the comments section.
Off topic but wow is our Stock market crashing! :(
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