‘The State Of Construction In Vancouver’ – “The townhouses are for sale for $2M to 6M, they are unsold, and, it seems, already in need of repair.”

“I live on the top floor of a high rise in the South Granville area and can see the roofline of the new townhouses at 16th & Granville from my living room. Yesterday, in the teeming rain, I spotted someone tossing a white sheet of plastic over the edge of the facade in what appeared to be an attempt at blocking a leak. The townhouses are for sale from $2 to 6M, they are unsold and, it seems, already in need of repair. This is the state of construction in Vancouver.”
Observer at VREAA 1 Nov 2012 9:59am

When a market rewards workers more for quick, shoddy work than it does for genuine honest craftsmanship, building quality will obviously drop. That’s human nature.. why do it right when you can get paid the same (or even more!) for doing it poorly, and doing it quickly?
– vreaa

47 responses to “‘The State Of Construction In Vancouver’ – “The townhouses are for sale for $2M to 6M, they are unsold, and, it seems, already in need of repair.”

  1. Don’t expect quality when:
    1) Many consumers do not care about quality as long as prices go up
    2) The building materials consist of woodchips and glue
    3) Some of the construction workers like to snort powdery substances before work

    • I have watched the work here in Calgary for the last 10 years and would not touch a house, condo or townhouse that has been built in the last decade. Especially those that went up around the 2005-6 boom. I stated previously that a friend’s son (19 and completely untrained), who has been in construction for a year now, is foreman and oversees low-rise condo construction. A co-worker has also recently had a $35,000 assessment to fix flooding and leakage problems on her condo that is only four years old.

      Give me a 100 year old house!!! Please! At least it has stood the test of time, unlike these new pieces of junk that will likely be bulldozed or condemned within 20 years (as should the builders).

      • Forgot to mention that the friend’s son hasn’t been paid in 2 months and is starting to get a little miffed with the developer – it will probably be reflected in the quality of work (such as it is).

      • The quality of construction has deteriorated greatly and cheapest from the available materials and labor are used all the time. We rent a few years old house of a McMansion type and it is really not aging gracefully. If I ever buy a house it won’t be a new one or built in the last 10 years either. As the speculative demand winds down, the quality is going to come back as people are going to start to buy houses for what they are and not for the profit they are planning to make from the quick sale. And I am positively sure that 2-6 mln townhouses are not going to be sold and if they will be sold It could be considered a donation for the Canadian recovery from the unknown international hero volunteered to help us out, love them for doing it.

    • Hahaha, what a bunch of ridiculous statements. You could say the same about Ikea or Wall Street. Pure troll.

      • Just because you are selling this shit, doesn’t make my statements ridiculous.

      • SG -> Actually, not bad analogies you make, thanks!
        Ikea furniture… serviceable, fine for what it is, but definitely not quality craftsmanship, also tends to fall apart in.. how many years? (But, yet, isn’t it actually fairly reasonably priced?)
        Regardless:
        Ikea furniture is to well-made furniture,
        and,
        Wall Street (circa 2012) is to sensible investing,
        what
        Vancouver construction is to quality craftsmanship.

      • Rusty's Revenge

        @bubbly

        you’re my hero ❤

  2. Real Estate Tsunami

    Let’s wait until mandatory Strata Property Diclosure Statements will have to commissioned by Strata Councils by the end of next year. Smart buyers are advised to wait until these Statements are available, or be prepared to pay steep special assessments.
    Strata owners!
    Prepare for the second coming of the “Great Leaky Condo Crisis”!!!

    • As a side effect thes few additional rules that are going to be implemented in the Strata property act are actually going to make the condo ownership even more expensive than it is now.

      • Real Estate Tsunami

        How are they going to make it more expensive?

      • All the engineering and estimates are going to cost them and it is a new item in expenses. And stratas often pay twice due to an overhead costs and the requirement for all works to be licensed and insured and it is charged back to strata.

      • Real Estate Tsunami

        This costs will be borne by the owner I.e. offshore investor.
        So it will be be good news for the local buyer.

      • it’s like you are implying that most of the condo owners are overseas investors. I sold the townhouse in Richmond last July 2011 and in our complex there were hardly any overseas investors properties, may be 2-3 from 38 (I was the head of the strata council and I know that for sure). When I was about to leave we were having the strata council meeting with the property manager and he said that the cost of the engineering report is about $1000 ans that we had to specify the new item in the expenses.
        Also the local buyer is going to became the new owner as well and iafter that he is going to carry on these increased costs of owning And fixing his condo. I am not saying that it is a bad thing to force the owners to have the survey done and to disclose its results, it is just everything is done very suboptimal in a strata frame and it typically cost twice as normal to fix anything.

  3. vancouverbubbleman

    same happened during the 1990’s boom here…..leaky condos and falling down houses resulted. the fortunate thing is that nobody lives in most of the poorly built houses this time around so they dont have to deal with the water damage etc……….

  4. did anyone catch global news tonight with the dash-cam realtor talking how pre-sale condos are a scam? kid you not, global news 6pm… vancouver.

    • I expect Greenhorn aka SethM over at Realestatetalks will record it. I just heard on “da stream” that Q4 is going well for a few presales. Could be, I don’t know, but one thing I do know is in every market no matter how hot or cold, someone’s always busy and someone’s always struggling.

  5. Step right up folks and place your bets. The world’s most popular and biggest prediction market is taking bids on:

    Monthly House Price Index for Vancouver to be 121 or less before the end of 2013 at Intrade Last prediction was: $5.50 / share / 55% Chance

    • A market on 150 would be more interesting. The fact that this market is so far out of the money tells you something.

      • As I mentioned on Twitter, this Intrade bet was set up by a guy looking to hedge his exposure to his Vancouver real estate holdings. Basically, as I remember it, he had bought Vancouver RE for family reasons but wasn’t too happy about it. He was hoping to limit his exposure so looked for ways to hedge his exposure. Nothing except for synthetic hedges are available so he first asked around local forums about what they estimated prices would be in 2013 and he picked a level based on that feedback.

        The 2013 contract was set a few years ago and looked plausible, but 2011 turned out to be a good year and things were delayed. If the contract were for 2014 it would have a better chance. The issue with these specific contracts is that they require a high degree of accuracy of the 50% likely point to be heavily traded. I think there’s room to augment this contract base and set up a couple more contracts with levels at (say) 140 and 150 (as you suggest Thomas). One of them will stick as being heavily traded if 2013 continues to be weak.

        But ultimately it’s still a synthetic, though more complementary, hedge. I think there are forward contracts available on Teranet but I’m not sure how one would set one up.

        I felt for the guy. I don’t think he had much of a choice purchasing and knew he was taking huge risks. He’s trying to convince himself his purchase was a good one but I think he knows, at best, it was a big gamble. He took the initiative to set up this contract with Intrade and has been trying to kickstart its interest for a while now. I think it’s still too far out of the money, but there’s a small chance it could start to become interesting if 2013 proves to be weak.

      • I can’t imagine this market actually getting to meaningful size, to the point where individuals could actually effectively hedge their Vancouver RE exposure…. Who would take the other side of those bets?

      • Not many would… but in the shadow OTC world, banks and CMHC can write unlimited CDS (long positions) cause they have a printing press behind them.

      • Betting on a fictional number dreamed up by a crooked cartel?

        That pretty much takes the cake for derivatives.

        Using it to hedge stupidity: priceless.

  6. Semi-off-topic:
    Hungary plans to offer permanent residency (and later passports) for EUR250,000. The plan is “targeted at Chinese investors”.

    http://www.telegraph.co.uk/finance/financialcrisis/9644190/Hungary-plans-to-offer-passports-to-investors-buying-its-debt.html

  7. Real Estate Tsunami

    How quickly they forget.
    Hungary was once overrun by the Huns.

    • Rusty's Revenge

      this .. is racist, right?

      http://gunrunnerhell.tumblr.com/image/26817798472

      comrade, how dare you compare the glorious workers paradise in the middle kingdo-… ah, fuck it – is this historical snark still funny to anyone but me? Hungary would be advised: elbows out on the skytrain..

      “If you play a little rough, you get respect. And with respect you get just a little bit more space on the ice.”

  8. Speaking of the “state o’construction”… I would hazard a guess that the following does not bode well for either increased civic or provincial scrutiny of the building trades/development community…

    …” I was at the most recent BC NDP fundraising dinner, as a guest, and I can tell you it was just like the Campbell dinners of 1999: all the major players–well, most of them anyway, didn’t hesitate to drop $3,500 – $5,000 cheques on the NDP. The room was packed with 950 strong, to the extent that there was hardly any room for the media. Think about it: there were more active participants at an NDP one-night-only, downtown fundraiser, than there were for the government at a three day convention in one of the most prestigious winter destinations in the world.” – Alex. G. Tsakumis

    [RebelWithAClause] – (UPDATED) The BC Liberal Convention: Christy’s Free-Enterprise Fraud Days

    http://tinyurl.com/bwt5ohn

  9. Actually, these townhomes on Granville are extremely high quality built homes. The tarp was used because they had to keep that area dry from the rain. This post is not correct. And the homes are just about sold out. Next…… I’m a big bear, but I don’t like bs stories.

    • It’s clear to any reader that the original anecdote contains assumptions.
      ‘Observer’ sees a tarp being thrown over a building and assumes there’s a problem with leaking. Fair assumption, given what we all know of Vancouver buildings and tarps.
      If you know more (“they had to keep that area dry from the rain”), give us details and we’ll append a note to the original post.

    • Why did they have to keep that area dry, I thought these units were finished. A completed building should never need a tarp unless there is a problem.

    • vancouverbubbleman

      it was overblown…i saw a very small tarp- i drove by to see. by the way……go the “the crescent on mcrae” website…….only 3 of 15 have sold…not that it matters. they look nice inside but not for 2 mill for 1300 sq ft or 6 mill for 3500 sq ft.

    • The tarp was used because they had to keep that area dry from the rain.

      Yeah, that does sound like high quality. If they do it every time it rains, they will never experience any leaks.

  10. Real Estate Tsunami

    Ain’t no pot of Gold at the end of that rainbow.
    Just a soggy pile of Gyprock.

  11. Any time you need a laugh just look at who exactly sits on the “boards” of sundry organizations like the various provincial “new home warranty” programs…….etc………

    Builders, RE developers, contractors……etc…….

    The smallest book in the world is the “Registry of Cheques Issued By New Home Warranty Programs”.

  12. Pingback: QUALITY : The State Of Construction In Vancouver’ |

  13. Who in their right mind would pay $6 million for a townhouse?

  14. Interesting that CTV started news a couple of days ago on condos – no not a line up or sell out but people demanding deposits back and trying to back out of deals for some high end development downtown. How times have changed. I tried looking for the story online but no luck yet..Cam Good must be blocking access!

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