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Olympic village Salescos go after three buyers who balk at completing

February 21st, 2011 · 19 Comments

Some buyers sued the village last year to get out of completing their purchases. Now the village’s Salescos — those legal entities created to do the actual legal agreements — are going after those who refused to complete their purchases.

The details here.

Categories: Uncategorized

  • vreaa

    Frances –
    Thanks for all your commentary.

    At the VREAA we have headlined an important quote of yours from your recent CBC Radio discussion with Kathryn Gretsinger.

    http://wp.me/pcq1o-1RK

    Here’s the quote: “This is a city where we’ve built our economy, and many of us have built our personal lives, on speculating on real estate. Even our own houses, we pay crazy prices for them, in the expectation that prices are going to rise, not because our incomes can in any way cover them.”

    We wholeheartedly agree, and have long argued that the Vancouver housing bubble is driven by the rampant speculation of locals.
    See the link for discussion and other relevant stories.

    -vreaa

  • Michael Geller

    Here’s an abbreviated version of something I posted on a related discussion.

    When I was young, ordinary people bought homes to live in, and rich people bought apartments to rent out.

    I would like to suggest that this changed in the 80′s when Marty Atkins and Stan Kates started their imaginative ‘Priority Registration’ pre-sale condo programs in Toronto. The first project I can remember was the Polo Club on Bay Street, which featured very small units, and when the TV evening news showed photos of people lined up outside, it was the birth of a new phenomenon.

    Priority Registration created a false sense of urgency….one day I’ll write about all the ‘tricks’ Stan and Marty used to market their projects. But many of the purchasers were investors and others had to act so quickly, they were treating their purchases as investments, rather than places to live.

    Indeed, many subsequent projects were designed and marketed as investments, rather than homes for ‘end-users’.

    Years later, Bob Rennie and Dan Ulinder started to successfully market small condominiums in large projects in Vancouver using a modified version of the Atkins/Kates approach…a project on Howe Street was one of the first. They too attracted investors along with genuine home buyers.

    Eventually this grew into the wide spread program we have today with far too many units purchased by investors intending to flip, or rent out until the prices appreciate, rather than live in the units.

    I agree that these highly successful, pre-sale programs have contributed in part to the cost of housing in Vancouver. Now some will say this is nonesense, that people will only pay what the market will bear. But some of the pre-sales programs have been so creative, they have created the market. I would point to the Woodwards Project as just one example.

    That’s why its maybe not such a terrible thing when investors do lose out on pre-sale purchases…it’s sad of course for some of those affected, like some of the early investors and purchasers at the Olympic Village….but maybe it is a necessary reality in the overall scheme of things.

    Hopefully the high profile losses will encourage some people to start to look at real estate as a place to live, not a slot machine that may offer a big payout. Maybe it will help some people understand that although real estate does always go up over the very long term, it doesn’t always go up in the shorter term.

    That being said, I see there were people lined up to buy in Burnaby over the weekend. I wonder how many of them think there’s a big payout down the road. To those who paid $600 a foot for an investment in the new MetroTown condominium, as reported in the paper, I’d say don’t spend your anticipated profits just yet.

  • senilodon

    Great piece of sleuthing,Frances.How many other developments in downtown Van. are in trouble?I have noticed that the new tower on Burrard St.(it’s called the “Patina”) at the old YMCA site is not yet experiencing move-ins,despite having sold out years ago.What’s the delay there?

  • Morry

    Michael Geller… thank-you very much for this report!

    “I’d say don’t spend your anticipated profits just yet.”

    A breath of fresh air.

  • Deacon Blue

    Just in time reporting for the two towers announced yesterday for the south side of Burrard Street Bridge at Vanier Park.

    The spinning wheel doesn’t stop. It just keeps going ’round.

  • Julia

    I watched a Global segment about the sale of the Village a False Creek and a project in Burnaby (the name escapes me).

    Selling pitch by some of the RE agents – good investment to hold – better than stocks. It had very little do to with living in the unit and quality of life. The Burnaby project sold out in hours. 3 years of speculation with only a percentage down. Don’t make your expected profit, simply walk away and see what happens. Tough to sue you when you live thousands of miles away.

    We have to realize we are a safe place to park investment money. It has absolutely nothing to do with livability, being affordable, community, or the concept of actually moving in.

    I am not racist… (really) but this international speculation and safe haven investing is really getting to me.

  • Michael Geller

    Deacon Blue…I think the towers at the south end of the Burrard Bridge are planned to be rental…unless things have changed…

  • Deacon Blue

    The radio report I heard had one tower as rental & the Council Chief saying it would be “A cash machine” for the aboriginal nation. The other tower… I dunno.

    What is the history of that black and green “Y-Block” that looks so much like a Modernist utopian scheme?

    And, why should we not look at these two towers as “tower sprawl”? Surely, this is something we want to discourage.

    A hi-denstiy revenue model (without a casino) can be developed for the band lands without having to go hi-rise. Maybe this is where the OV is really hurting us going forward—density there seems to be pilling on upon itself to oblivion.

    However, a “destination district” would surely be a better fit in this unique corner of our city than another two plop-plop towers.

  • Ron

    It’s called RISK.

    If you buy stocks there’s no guarantee that the price will rise. Ditto for real estate. Do your due diligence.

    If you sign a legally binding contract, you must understand the risks involved.

  • Roger Kemble

    Deacon Blue @ #8

    “. . . that black and green “Y-Block” . . .” is the Parkview Tower build, as rental, by Mayor Tom Terrific (1967-72) just after he left office.

    I have visited in a number of the suites: conventional layout, beautiful views.

    Is it strata now? Is it leased on First-Nations Land? I dunno.

  • Wendy

    Re: Michael Gellar’s helpful history of condos above:

    The one thing I’d add is that until maybe 5-6 years ago, one could buy and investment condo in Yaletown, for example, and rent it out for enough to cover most–if not all–of the monthly mortgage etc. costs. Even without thinking of appreciation, such an investment made sense as a tenant would be paying down your mortgage, not you.

    Today, unless you start with a significant down payment, you the investor will be subsidizing that unit if you consider it on a monthly cash flow basis.

    A while back I did the math for a 2 bedroom condo on Beatty Street (comparing owning it to renting the equivalent unit at the newer purpose-built rental 939 Beatty across the street) and the difference was $1300 a month.

    Most of us mere income mortals could not afford to do that, and others might not necessarily want to.

  • rf

    $25,000 down. $350,000 borrowed.
    $100/month net income after mortgage.

    $1200/year on $25,000 = 4.8% return on the $25,000.

    Of course…..that’s only achieved by utilizing 15x leverage on your money.

    Based on $375,000 in capital exposed, your rate of return is on 0.3%.

    It takes a very special sense entitlement for anyone to cry foul if they get their head handed to them on this type of “investing”.

    In fact, “investing” is a bit of a stretch to describe it. “Speculating” is far more appropriate.

  • Max

    @ Decon Blue #8

    It will be interesting to see what happens with the FN ‘towers’.

    There are a pair of nesting eagles living in a large tree on that land. They have been there for decades. Last year, they had three eaglettes. It was beautiful to watch them learning to fly under the watchful eyes of the parents.

    I, and I would guess many others that walk/frequent that area would hate to see their home destroyed for the sake of a couple of towers.

    When developers build, it should be a requirement that they build within the keeping of an already established area, rather than banging up something that is totally out of place.

  • Morry

    “this international speculation and safe haven investing is really getting to me”

    Politicians – time to heed or get thrown out of office.

  • Tim B

    People signed a contract and should live up to it. I own property in the US that has dropped by 25% in the past couple of years and nobody has offered me a a bail-out. Live with your decisions and hopefully you learn some lessons along the way.

  • Morry

    I am not sure if anyone is asking for a bail-out as much as they are baling on their contract to complete the sale. There are laws for this… they loose their deposits and if the vendor chooses to may also be sued.

  • BCAA

    Michael or Frances, do you know if the rules governing property buying by non-citizens are less regulated here as compared to other places, for example, Australia, New Zealand, counties in Asia or Europe? I have a friend who just purchased a house in Phoenix and she mentioned that there taxes that are only charged non US citizens which is not the case in Canada. How about other places? What I am trying to understand is there something about our land purchase regulatory framework which makes speculation much easier here?

  • Deacon Blue

    @ Max 13

    Building that is in keeping with the eagles… now that sounds like a First Nations quest to me.

    What we are talking about, I think, is the total disconnect between economic values (the view) and a host of other values including community values; ecological values; and cultural values, to name three that painfully evade the real estate markets.

    What is missing in the discussion is the fact that environmentally sensitive built form would return equivalent levels of financial compensation.

    Let’s factor THAT into our plans, folks.

  • Norman

    I would balk at completing. The finish of those apartments is appalling, and now they are priced appropriately. Previously they were overpriced.