As Vancouver’s real estate market cools, losses on the troubled Olympic Village development could soar above $225-million unless condo king Bob Rennie quickly drops prices on unsold units that have languished on the market for too long.
That’s the view of developer and architect Michael Geller, a former NPA council candidate, who suggests flawed pricing and weak marketing is turning the fiasco on False Creek from bad to worse. …
Geller said he fears the city will be unable to sell many of the remaining condos at current prices, as Vancouver’s real estate market seems to have peaked “a year ago when there was a lot of fervour from Asian buyers.”
Geller says better to cut prices and stop losses as competing developments and resale units start to hit the market at prices below Village units, than continue to pay carrying costs for years in hopes of seeing a big real estate rebound. …
“A lot of people in the real estate community are saying this project shouldn’t be taking years to sell out. Everybody knows the market has softened over the last year, and is going to continue to soften.”
…
“The problem with arm chair gossip that the Michael Gellers of the world have, is they don’t sit in the board room with the decision makers and the stake holders … and we have fine-tuned the pricing all the way through,” Bob Rennie said. …
“People come to town and say it is a bubble, but what do they know?” Bob Rennie said.
…
– from ‘Developer Michael Geller says city should cut losses by discounting Olympic Village units; Condo marketer Bob Rennie dismisses Geller as ‘politically motivated’, The Province, 24 Aug 2012
People from out of town have… perspective.
– vreaa
Vancouver Real Estate Anecdote Archive 
Who couldn’t have seen this train wreck coming?
I know Rennie is shrewder than he comes across here. The answer an addict loves to hear is that the rest of the world is wrong. Alas, the old adage is, if three people tell you you’re drunk, you’re drunk.
I’m gland then that I’ve only had one tell me that and that I have the universally accepted excuse- “I’m a grad student.”
If you have lived all your life in a real estate lunatic asylum where the patients run the institution, it seems normal after a while…
“People from out of town have…perspective.” Very well put. Very true.
When we arrived in Toronto in 1997, real estate was soft and the neighbourhood that caught our fancy was apparently a “no-go zone”–after all, it was “east of Yonge Street” which snotty Torontonians simply wouldn’t consider. “Isn’t it dangerous?” we were asked more than once! But we were from out of town. PRices looked awfully cheap compared to our previous home in Vancouver, and try as we might, wandering around the sleepy streets lined with Victorian houses within a stone’s throw of the financial epicentre of Yonge and Bay Street (I could walk easily), there were no threatening muggers in sight. We trusted our “outsider’s perspective” and bought. We sold two years ago for a shocking 400% profit. The same perspective that got us into the market no one wanted, got us out before the trouble starts. I’m not sure we our really smart, or that we can repeat our good fortune. But being an outsider gave us some edge that the locals simply did not have. Listen to an outsider once in a while…at least for some perspective eh.
No no no. I’m originally from Calgary. That means I must be a conservative Christian, personally responsible for Harper’s rise to power, with no culture or no education and a desire to destroy nature through development of the oil sand and their associated pipelines. The reason why I think housing is ridiculously overpriced in Vancouver is that I just don’t understand why it truly is “the best place on earth.” What do I know coming from a Americanized suburban wasteland with no culture, nature or hot Asians in yoga pants?
… Other than I’m from a city built on boom and bust cycle and I’m just calling the god damn Vancouver housing market for what it is because I know what a bubble market is from first-hand experience.
The “God Damn” gave you away as Albertan. 🙂
@Allen
Funnily enough, I’ve picked that phrase up after working with several Americans. I didn’t previously use it regularly.
Calgarians know real booms. In a real boom, your friend or neighbor who is otherwise an ordinary chap suddenly starts going between his *homes* via private plane, rather than commuting down Crowchild in his 9-year-old Buick with running boards in the snow. Parking downtown for 8 hours *starts* at $40, but that’s okay because you’re billing out at $1500 / day if you’re a consultant and earning hundreds of thousands if you’re a salaried professional or ticketed trade.
Vancouver, by contrast, has not experienced a boom. Swaggery people frittering away their $1MM HELOCs and yammering on about their “holdings” to uncomfortable guests at dinner parties are not symptoms of a boom. People who have lived in places where there actually *is* wealth know this.
The interesting thing is that although it has not had a boom, Vancouver *is* going to experience a bust. Sort of like drinking 4 skunky beers at the Cambie on Friday after work: you don’t ever really get drunk, your share of the bill still ends up being $30 for some reason, the hangover actually starts before you go to bed, and you don’t really feel right again until lunch the next day.
Saturday night, you rent a movie and go to bed early.
Fair enough LogRider. I did part of my med. training in Edmonton…maybe I was hearing Texans up for a visit to Fort Mac. at the time?
Last time I was near the Olympic Village it looked like there were 5 new condo buildings being built right next to it. This won’t end well.
It might end well for people looking to buy condos at non-insane prices. But given that the stock will likely kept off the market to maintain high demand while the developers collect government bail-out simultaneously, this is a low probability event at this time.
Global TV, for what it’s worth, reported the other evening that 90% of the units in those buildings have been “sold”.
From VCI, on Oympic Village,
“I think part of the problem is they realize just how far prices have to drop for these units to sell.
A friend of mine is living in a 2BR unit that’s been foreclosed on, and there’s still pretty tepid interest at 629,000 (after 3 price drops; sounds like $599 is close).
Identical unit a floor above is till priced at $849 from the developer.
That’s a serious haircut to get units moving.”
Who wants to buy overpriced condos in the Olympic Village with lots building problems etc!!!!
Olympic Village could very well end up being Vancouver’s new drop-in centre after the city’s condo market crashes.
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