Canada: Construction Grinds to a Halt in Vancouver
Not next to my apartment at least.
I live in downtown Vancouver and construction is continuing at a frantic pace on plently of developments downtown. The author picks two very disaparate examples and tries to weave a story out of nothing really. Surrey is not a suburb of Vancouver at all, thats like saying Navan is a suburb of Dublin. Surrey is in the sticks nearly twenty miles from downtown. Towers in Surrey, don’t make me laugh, why would you buy a high-rise condo in Surrey of all places? Sounds like a dodgy development to begin with. Funny though because if I remember correctly Millenium was also the developer of my condo building!
As for the Ritz development, well thats really the developers own fault. Most new condo developments in Vancouver in recent years haven’t broken ground without at least 80-85% pre-sales, legally binding contracted pre-sales. The Ritz went to construction with only about 50% pre-sales, that was not a good sign especially in light of the current economic situation. In the press here they have sighted ‘engineering’ issues as the main cause of the delay, whether or not that is true remains to be seen.
There is a slowdown in the Vancouver area no doubt about it, prices are crawling down but not as fast as in the rest of Canada, the one thing that is keeping them from doing so is the Olympics in a little over years time. The Olympics will keep prices from falling off the edge until 2010 at least. But in my humble opinion the Olympics financially will be a disaster for the province as I feel the government here has gotten poor value for money in the Olympic related property & infrastructure developments. $800 billion for an upgrade to a 126km 2/3 lane road from Vancouver to Whistler is bit much when an underused rail line could have been developed instead.
Is there any economic reasoning behind the belief that hosting an Olympics keeping property price high or is it just that it generally keeps sentiment positive?
It did in Calgary. I’ve been told by natives that the city grew from 400,000 to 600,000 during the pre-Olympics boom and maintained and grew its economy and house prices afterwards. That’s the example they look at.
I lived in Vancouver for the Summer of 2004 and sentiment at the time was certainly that the Olympics would bring a similar boom.
The above poster is correct too, Surrey is a bad example.
Maybe prices will hold and development will continue up until the Olympics but I doubt prices will hold up after that.
Anecdotally, I a lad that was over from Scotland to invest in Vancouver property way back then in 2004. I hope he’s flipped whatever he bought already.
The Olympics will have brought, at the very minimum, Irish levels of Canny investors.
I’m going to make a very bold prediction that it’ll all end in tears.
Majik, did they ever succeed in kicking the brassers and crackheads (not mutually exclusive) out of Vancouver proper? How much of the development went on East of Granville? I’d fear for property built that side of the street. West of Granville is very bubbly indeed. CAD 1m condos, I’m not sure it’s sustainable.
I was last in Vancouver in '04 and prices were very high back then, have those prices sky rocketed since?
Bloody nice city that place.
Yep prices are still relatively high compared to the rest of Canada. What we will have in the next few months in Vancouver though is an oversupply of new units. The rental market is now being flooded by owners listing properties. In the last three months alone I recall three new towers completed with a total of around 600 units coming on to the market at the same time. This is in downtown Vancouver alone.
As the other poster pointed out the Olympics will keep the market in check even though the overall trend is downwards. What the provincial government does after 2010 is anybodys guess. I’m presuming they are hoping for an upswing at that stage but I only see an up swing in other areas of the economy at that point and not an upswing in property. There has been a lot of capital infrastructure investment for the games and when these are complered in the next year or so expect prices to be bouyed in the areas that they serve.
As for the lowerlife that JammyBastard spoke of, well its still all there. The downtown Eastside is officially one of the poorest places in North Amercia and you’d be hard pressed to find anywhere like it in Europe. Abject poverty, thousands of homeless on the streets and in tent cities in parks, addicts, hookers and all the related crime etc make this area Vancouvers dirty little secret. The UN recently declared the conditions there ‘third-world’ like and called on the government to do something about it. I am sure the people there will be moved on elsewhere for the Olympics, they did so for the Expo in 86, then again for the development of Gastown and Yaletown, always pushing them eastwards, when eventually they probably won’t be even in the city limits and then it will be Burnabys (adjacent city) problem. It really is a fucking disgrace. Its a major sore point for the Olympic organisers and there have been numerous anti-poverty protests and ‘civic-actions’, expect those to multiply as we near the games.