Distressed Condo Owners – “So many owners have spent all but their last dime buying the place. Some already spend half or more of their income on mortgage payments and strata fees. The special assessment was defeated because more than half said they couldn’t afford it.”

“It’s often difficult to get the majority of owners to agree to the appropriate monthly fees to cover ongoing maintenance, operation and replacement.
It’s difficult because so many owners — especially in the Lower Mainland — have spent all but their last dime buying the place.
But it only gets worse as buildings age and expensive repairs become inevitable. The Condominium Home Owners Association of B.C. estimates that 10 per cent of the province’s condos are now between 30 and 45 years old and in need of major renewal.
Some are in such disrepair that owners are openly discussing how to liquidate the strata corporation so they can sell the property for redevelopment.”
…
“Until 2009, big-ticket repairs such as replacing plumbing, decks, windows, elevators, roofs and renovating common areas had to be financed through special levies, which require approval by three-quarters of the owners at a general meeting.
They’re difficult to get passed.
Some owners are tapped out, with some already spending half or more of their income on mortgage payments and strata fees.
There’s also a cultural gap, Tony Gioventu, CHOA’s executive director, says.
“It’s a foreign concept for some ethnic groups to repair and maintain buildings … There are some specific ethnic groups who will run a building to failure rather than maintain them to longevity.”
He declined to name the ethnic groups.
There is also an increasing number of owners on limited pensions.
Gioventu cited a recent case where the mainly retired owners in one North Vancouver condo all agreed that balconies and decks in the aging building had to be fixed. But the special assessment was defeated because more than half said they couldn’t afford it.”
- from ‘Condo life is rife with conflict’, Daphne Bramham, Vancouver Sun, 26 Oct 2012

More stories of people who can’t afford their own homes.
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“The purchases are the fifth and sixth properties that Forsgren owns and plans to rent.”

“Don Forsgren has heard pundits speculate that Vancouver home prices will drop by as much as 40% during the next five years – but he’s not having any of it.
The Intracorp Canada president recently committed to buying two units in his company’s MC2 development near southwest Marine Drive and Cambie Street. Another 18 units in that project have sold to insiders while the remaining 425 condominiums will be made available October 27 to the 6,500 people who have registered to be eligible buyers.
The purchases are the fifth and sixth properties that Forsgren owns and plans to rent.
“Vancouver has a good base level of demand from immigration and population growth,” he told Business in Vancouver. “That’s not going to change over the long term, so we’re quite bullish about the prospects of the market from a stability point of view.”
That bullish sentiment is clear from the spate of Metro Vancouver housing projects that Intracorp has in the works, many of them near transit hubs”…
“Our target is to do about 1,000 homes each year in Vancouver and about 500 in Toronto. We’re on track to do that in 2012, 2013 and 2014.”
- from ‘Don Forsgren: Home maker’, Business in Vancouver, 23 Oct 2012.

We suspect that, unlike the case of the man-in-the-street investor/speculator, the housing market could tank and Don would still be fine despite his advertised RE holdings. Those 6 units are surely purchased cheap, and likely represent a risk of only a small percentage of his net-worth. A bit like a chef dining at his own restaurant, a clothing chain CEO wearing his own suit brand, or a car dealer driving his own stock.
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Arguments With Myself – “The perception of offshore money pouring into the area to acquire properties without foreigners even visiting them has been overstated.”

“The perception of offshore money pouring into the area to acquire properties without foreigners even visiting them has been overstated, said Cameron Muir, chief economist at the B.C. Real Estate Association.” – from ‘UniverCity condo project feels market chill’, G&M, 23 Oct 2012

Gee. And where would people have gotten that impression?:

“There are high-net-worth Asian purchasers buying as investments, as second homes, or for satellite families.” – Cameron Muir, chief economist for the British Columbia Real Estate Association, Businessweek, 24 Jun 2010

–
Off-shore buyers have had a small but significant direct effect on prices, and a very, very large indirect effect as a story that has fuelled locals in their speculative buying. We’ve consistently believed that.
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