Wednesday, June 5, 2019

Real Estate Blues

Developer Ledingham McAllister is putting on hold presales for three high-rise condo towers near transit stations in Burnaby and Coquitlam as market looks uninterested in taking up the 50 per cent of units the developer needs to qualify for bank financing.

There's a real estate crisis going on in the Greater Vancouver Region.  The huge, high-floating blimp of the West Coast Real Estate bubble has finally burst.  Please read the following snippet from the Vancouver Sun and I will have more comments to follow:

"Developer postpones pre-sales for high-rise towers in Burnaby and Coquitlam

There has been a dramatic slow-down in pre-sales centre traffic starting around last October. It's estimated to have dropped by about 70 per cent. 
Vancouver developer Ledingham McAllister is putting on hold the launch of pre-sales for three high-rise, transit-hub condo towers in Burnaby and Coquitlam, and is considering a pause on a fourth.

The total value of the projects — Sydney, Highpoint, Azure and possibly another — is around $1.2 billion, according to company president and CEO Ward McAllister. The buildings range from 20 to over 50 storeys and include market, non-market and rental units.

McAllister pointed to a dramatic slow-down in general pre-sales, beginning last October, and estimates sales volumes have dropped by about 70 per cent.

There has been evidence that smaller, newer developers are throwing in the towel and selling land instead of riding out an increasingly tough market. And the development industry has been vocal about bureaucratic delays getting in the way of building units that will be much needed once buyers return....."


Greencrow says:  The Vancouver real estate market is bleeding red ink.  So are the markets over on Vancouver Island in Victoria and the other smaller centers.  According to the "experts" this implosion of what for decades was a steadily rising market is blamed on the crack-down on foreign [Asian] money launderers.  There was a report released by the government based on an investigation of money laundering in British Columbia and it was shocking how billions and billions of laundered money was artificially inflating the price of homes and condominiums.  Now that the supply of laundered money has dried up, obstensibly, the bottom of the market has fallen out.

I don't think so.  In talking to my friends, neighbours, acquaintances and listening to what they have to say...I believe some of the slowdown, at least, can be blamed on the real estate developers not understanding the demographics of the market and not designing appropriate housing to meet it.

There's a huge bottleneck of senior, retired homeowners, like myself and my husband who yearn to downsize.  We want to get rid of all the crap accumulated over at least four decades, quit the maintenance and upkeep of an aging home and move to brand new, spiffy accommodations with no stairs.  Unfortunately, the new stock of housing dramatically fails to meet our needs.

Perhaps it does not and cannot exist in this economy, but what we require to make us sell our homes and move is the following:

- Three bedrooms and at least two bathrooms on one floor.
- large outdoor space with room for dogs, small plot of gardening and outdoor entertaining
- Not in a highrise.  We don't want to be trapped on upper floors if there's the inevitable electrical outage/elevator failures
-not crammed together with other buildings where your balcony is a stones' throw from other balconies and you're on top of your neighbour
- Modified floor plan that allows for a decent-sized dining table...not just bar chairs pulled up to a kitchen island.  The "open concept" is just a way of cutting back square footage.  One big room is boring.
- enough floor space so the buyer can bring some of their own furniture.  Today's apartments all have built-in shelving.  There's no room to bring anything other than a table, sofa and bed.  The bedrooms are just large enough to walk around the bed  No room for a dresser or anything else!

When we were travelling in China a year or more ago we were surprised to learn that the apartments in high rises were just built to the studs and left for finishing by the purchasers.  Not even toilets were installed!  But the prices reflected the unfinished state of the suite and the purchaser could divide it up as needed.  No cookie cutter there!
Let's face it, given the crowding in West Coast cities, there's probably not land enough to build the desired housing I described above.  Which means that more and more seniors are considering moving to smaller centres like over on Vancouver Island where they've been catering to retirees for decades.  On the island there are entire communities of the ideal housing stock..."double-wides".

Yes, the ideal housing for seniors is a brand new portable double-wide, customized inside to include a gas fireplace.  It's all on one level and there's generally yard space for a small fenced-in garden.  Most important of all, the almost mythical "double wide" would be a fraction of the cost of a high rise condominium or townhome.  As it stands.  If we were to sell our home today we would barely have enough money to cover the cost of the much smaller condominium which wouldn't suit our needs.

If the preferred "double-wide" design was readily available, then the bottleneck of seniors still living in their old houses would be broken, We could sell our homes, move to our new appropriate housing, able to take a few precious pieces of furniture with us.  Families with children could then move into our vacated homes and do all the backlogged renovations and maintenance that these houses need.

But no.  We have to have empty and unsold inappropriate housing stocks crashing the market.  I don't know who they were building all those high rise condominium towers and those tiny, narrow townhomes [most of the square footage made up of stairways] for.  The spaces are too small for families and have too many stairs for seniors.

The only people who can live in the new high rises or tiny, narrow townhomes are single workaholics who only sleep and eat in their condos and travel back and forth to work the rest of the time.  I guess there's not enough of that sad, pathetic breed to fuel the market.  So it crashed.  Whatever.

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