Monday, February 26, 2007

More Apartment Supply for Surrey

More on Surrey Developments. Who is going to buy all of these condos?

Ooooh, ooooh, ooooh, I know, I know - - - - - IT'S THE SPECULATORS SILLY. Very few of these people are actually buying these units to actually live in them. Housing is not for living in, it's for investing dummy!

By Kevin Diakiw - Staff Reporter - Feb 23 2007

21- and 25-storey structures planned for 108 Avenue and West Whalley Ring Road. Two more huge residential towers are in the works for Whalley. Century Group Lands Corporation plans to build two structures – 21 and 25 storeys – at 108 avenue and West Whalley Ring Road. Total cost of the project is expected to be about $75 million. Located across the street from the Gateway SkyTrain station, the towers will contain a total of 452 suites. Graham McCollum, vice-president of development for Century Group Lands, said if all goes well, the buildings should be complete by 2009. The project proposal will go to public hearing Monday. It’s the second large project announced in the Whalley area in the past week. An 1,100-unit project was announced Monday, only a few blocks away on 108 Avenue. McCollum said the area is gaining market momentum. “This particular area is obviously an area in transition, so we want to be part of it,” McCollum said, adding access to SkyTrain was key in choosing the location. He predicts more development like it in coming years. “I bet 10 years from now, that area is going to look totally different than it is now,” McCollum said. The project is before Surrey city council Monday at 7 p.m.

More Developments:

Land rush in Whalley

Residents in North Whalley should get ready to welcome new neighbours. Quattro Phase One, a 140-new home development near Gateway Station, sold out in four hours, scooping up $36 million in the process. Homebuyers lined up hours in advance to lay claim to the Lower Mainland's least expensive housing project with units starting as low as $119,900. The 10-acre development has drawn so much attention that the second building will be fast tracked, giving priority to bidders who missed out on the first building. In total eight buildings will be constructed, offering units that increase in price at $10,000 increments.


mohican said...

Unfortunately, this will end very, very badly for many people.

Warren said...

Yes, there was an article in the paper this morning about the first 140 units selling in 4 hours and in particular one 24 yr old woman, a "psychology graduate" who bought a 400sf studio on the 2nd floor for $135k or so. Her next quote was about her "granite countertops and stainless steel appliances", and her partner living there with her.

I have trouble feeling sorry for these people, honestly.

Anonymous said...

There is some guy who is already listing his 2 bedroom unit for sale in today's Craigslist. The greed.

Freako said...

You know those big ugly concrete shells that linger for a decade or so after housing busts. If I were to have enter a "dead pool" of unfinished concrete hulks, this would be my prime candidate.

Cecil said...

Yeah Boombust, I saw the same ad on Craigslist. The guy is asking $360K for an 881 sq ft two bedroom unit. That's over $400/sq ft!! For not much more you could get a two bedroom suite downtown.

mk-kids said...

serious price compression at work... port moody & downtown rental & purchase prices for 2 bed, 2 bath are about the same now (pm has more sq footage generally but not much)...

we've been looking at places to rent in port moody & every thing we've looked at is for rent by a first-time investor. one guy from poco took equity outr of his house to buy a newport condo and is looking forward to retiring early. another place we looked at was one of 2 apartments bought by three friends as investmnts. another owned by a nice couple and another owned by a realtor.

Freako said...

"we've been looking at places to rent in port moody & every thing we've looked at is for rent by a first-time investor. "

And when sentiment turns, this type of buyers will scurry for cover at best, which means that demand will fall off a cliff. At worst they will panic sell.

Warren said...

So a good strategy might be to rent your ideal place from one of these schmucks and then offer to buy from them when the market falls. Noted.

stormy petrel said...

Warren hello

Perfect strategy.

Clarke said...

Where are these buyers coming from? I thought we had run out of speculator types with all the downtown condo developments being presold. But, a mad rush to buy a development in Whalley???

bs said...

On all the blogs i've been reading all i see are bears..i am not a experienced investor etc., but just a university graduate who started his first job..

why does the market has to fall into the ground? why cant we have a 5%-7% decline over 2-3 years which would get rid of inventory? what exactly is the news that we are going to hear thats going to crash the markets?

The psychology student bought for $135K, if she put 35 down, her payments are around $600/month plus taxes etc. Wheres the affordability problem? Everyone here thought that no one would buy Quattro, but it was all sound out in four hrs!! I think theres a lot of wishful thinking on these blogs..i wish the prices come down to, but will they?

mohican said...

bs - I would say that your scenario of the psychology student having $35k downpayment is wishful thinking - how many students do you know who are flush with cash?

A more likely scenario is that she did 100% financing over 30-40 years and over 30 years the mortgage payment is $780 / mo + $200 / mo strata fees + $100 / mo in property taxes and utilities. She is looking at a total monthly outlay for her 380 sqft dwelling of approximately $1100 / mo. She could easily rent a larger unit for $800 and save $300 / mo in the bank for a real down payment - waiting for prices to come back in line with rents.

As far as prices going down 5-7% over 2-3 years while rents and incomes rise to somewhat catch up with prices - that would be nice and soft for most people - but if history is any guide that scenario has never happened before and I highly doubt it will happen.

I am not calling for prices to "fall to the ground" as you put it but rather a 'substantial' price correction to put prices in line with rents and local incomes so normal people can afford to purchase a home. For me and my calculator this means a 20-25% price decrease plus rising wages and rents over a 5-7 year period.

OK said...

Excuse me but do all of you clever pundits realize that there is a rental shortage here?

PS Don't forget to adjust your clocks to 2007 this weekend.