“Going around to various open houses and pre-sales, it’s the RE agents’ last and greatest pull: “Now is a great time before rates go even higher”. Can’t tell you how many times I’ve heard that, trying to sell people on panic and fear. Once this group of panicking buyers takes “advantage” of low rates, there will be no more government help through easy lending practices and interest to keep this train moving.
Over the last couple of months, here’s what I and numerous others are noticing while doing the rounds in metro Vancouver:
1) Outside of Van/Burnaby/Richmond (Coquitlam, Surrey, etc), the discounts are coming! Half a year ago people would be snatching this up. Now, every development you look at seems to be offering “incentives”. For example, Rennie’s “Best value ever” in the Grand Central condos in Coquitlam – condo prices have dropped anywhere from 30-70k for the units, they haven’t been able to sell in Tower 1 – and this is before Tower 2 is even up! So many projects in that area sitting at only 60-70% sold only with other towers coming up. Notice how many “free mortgage payments for 2-3 years” incentives there are? You don’t think the developers know something?
2) Another example – In Burnaby, had this been half a year ago all new condos would’ve been sold out in a matter of weeks. Luma had the advantage of coming out early and are close to selling out with about 10 units left. Perspectives and Affinity towers which opened later, arguably much better than Luma, are both sitting at 65-75% for the last couple of weeks after a hot start. Half a year ago this never would’ve happened. Now they are sending out desperate emails saying to hurry in before the selection is gone. I don’t ever remember receiving emails to hurry in for other presales in the past year – they were gone. This is especially troubling for Affinity who has a phase 2 tower that is about to be released soon.
3) In East Van Downtown, the revival of the area is starting but not really going as fast as expected. If the market starts going down, do you think any developer will continue to try and continue fixing the area? Down the road, surely, yes, but it’ll stay put for the next coming while. Just take a look at the excess inventory – Rennie’s much overhyped Woodward’s with so much inventory, Smart Gastown, Ginger, V6A, etc. also with not much inventory moving there. Check out the 4 spectrum towers – 35 units for sale and 60 rentals available.
4) No one can remember the last time there has been so much rental inventory. It’s obvious it’s from the Olympics, but the effects are coming. Craigslist, for example, ‘1 bedroom in Yaletown for under $1800’ and see what you get. Even if half of them or more are duplicate listings, the number of vacancies is absurd. Owners who took “advantage” of the Olympic renters now face the same dilemma. Those who can’t weather the storm of a empty unit or can’t afford to rent it out for a much lower rate will soon flood the market trying to get out.”