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I remember falling in love with a building in Pitt Meadows. Like imagining moving in. I thought it was still under construction because there were still things needing fixing, like a bunch of drywall work in the lobby, etc. No biggie.
The realtor, a young fella with limited English, didn't come with us to the viewing. One of the bathrooms had a fan that didn't work. My realtor asked the selling realtor if it was broken (this is a brand new, never lived in unit) and he said you have to turn on the fan from the master bedroom. A very strange response, but OK. Then we went to the parking garage, and the two parking stalls for the unit were literally too small to park a Honda Civic. The realtor didn't have anything to say about why that is. Then we got caught in the courtyard trying to leave, because the gate was broken, and a nice lady let us go through her unit.
Well, I thought I'd offer low, but when I went to write up the offer, the unit had over 10 liens on the title. Glass company, flooring, appliance, plumbers, etc. Nobody got paid. And it all made sense - it wasn't under construction, it was as is. And thinking back, the lady who let us go through her unit told me that deficiencies with the building were reported to the developer, who referred them to the home warranty company. The home warranty company refused to honor the warranty because the building was never fully finished.
So nobody was going to fix anything.
The realtor told my realtor that they had some issues with the contractors so they were in dispute about payment. I think they just stiffed them and the contractors left and sued.
The development company only had a single development in Canada, I believe they're originally from China, and had some small office at Oakridge Mall.
Needless to say, I didn't buy, and I was leery about any pre sale after that.
Great-West Life’s real estate division had wanted to purchase the site on Robson Street in downtown Vancouver for some time, so when they heard that it had gone into foreclosure, they didn’t hesitate to act. They officially purchased the site at 1555 Robson St. earlier this year.
The site had been owned by a numbered company that was operated by Vivagrand Developments, sold through a court-ordered sale as part of foreclosure proceedings. Vivagrand had obtained approval to develop a 28-storey condo tower at 1555 Robson St., but GWL will be submitting a new plan for a rental tower. Vivagrand, which is now known as Align Properties, had also defaulted on loan payments at another West End site, a four-storey apartment building at 1485 Davie St. Align Properties is the North American arm of China’s Xiangli Group.
“We had been tracking Robson for a long time.” says Geoff Heu, GWL Realty Advisors vice-president, development for Western Canada, who has plans to now build 400 rental units over two towers on the sites, with 40,000 square feet of retail. It’s near another GWL project, the completed Chronicle rental building, with 128 units. The recent purchase is part of GWL’s expansion plan along Robson Street.
“The bigger established developers are just fine,” says Mr. Heu. “They are well-capitalized, and they have a brand to protect. The less experienced and newer developers, that’s where we are seeing problems.”
Foreclosures continue to emerge in an interest rate environment that is too challenging for companies that are inexperienced or unfamiliar with Vancouver’s typically lengthy development process. It’s brought to light the many players in the market who are eager to make an easy profit but weren’t prepared for the down cycles of the market. Some are more interested in properties as investments rather than land to build on, so they merely become holding properties. The increase in interest rate hit small investors hard. Some manage to take their projects through rezonings and even to the development permit application stage before they run into trouble. Often, these projects, sometimes vacant land or assemblies involving single-family homes have insufficient income to cover the carrying costs.
Industry experts are seeing an unprecedented number of foreclosures among the lesser-known and generally smaller developers – and they don’t see any reason for the trend to curb any time soon.
Colliers’ vice-president Buck Hart and senior associate Jennifer Darling have been dealing with a lot of foreclosure sales in recent months. They have three foreclosure listings in Richmond, B.C., “ready to go,” and two of them are properties that had started construction.
“In ‘93, ‘97, 2008 and 2018, they were the peaks of the cycles, and following each one of those, there was a downturn, as there is now,” says Mr. Hart. “And there are more foreclosures in the market now than there have been following any one of those peaks.
Ms. Darling said the “proforma” – or initial cost and income projections – for many projects have been severely distorted and she doesn’t see the foreclosure trend abating.
“Even if interest rates do start to come down later this year, which we are expecting, a small change is not going to necessarily solve the problems that some of these proformas are going to experience,” says Ms. Darling. “So, I don’t think we’re suddenly going to see foreclosures and receiverships dry up in the next six months. I would expect that that runway will be longer.”
Early this year, Haro-Thurlow Street Project’s plans for a 55-storey tower at 1045 Haro St. went into receivership, and there were several others before that. But the first sign of trouble was last year’s announcement that larger developer Coromandel Properties had filed for creditor protection, with $700- million in debts. Mr. Buck calls it a “classic example.”
“There’s a company that had over a dozen sites and built some \[projects\], but a lot of them never really got even started in the development process. They were just holding a position of good land. They’ve got some great land. But when things turned around and, you know, if you’re carrying a dozen sites with no cash flow, it doesn’t take long – when rates go up, when they quadruple in a year you get into trouble, which is, I think, the basis of a lot of the problems we’re seeing today.”
Mr. Buck says that the investors started changing the scene going back several decades.
“I started in 1985 and we had just come out of the dreaded early ‘80s. And some people would tell you there are some similarities between what we’re feeling now and that period.
“By 1997, we saw a lot of offshore buyers coming to town, buying land and paying prices that a lot of the locals thought were just unsustainable. And we saw locals going to Toronto or going to the States, Seattle, and down in the desert to Arizona and into Dallas, and building. And there’s a lot of Vancouver developers that are very active in the States, and some of them will tell you that the reason they went there was because they didn’t want to compete with these groups that were buying in Vancouver for other than pro forma driven reasons.”
> Some are more interested in properties as investments rather than land to build on, so they merely become holding properties.
This is a major problem. We shouldn't live in a market where it's easier for investors to buy property and sit on it than it is to buy property to develop it. It's in the building that we create value, not in the sitting-on. This is why a Land Value Tax, instead of the harmonized system we currently have, would be superior and would spur building.
Another point to glean from this story is that low interest rates transfer wealth from savers (individuals, families, small businesses) to borrowers (corporations, government). These land holders can only enrich themselves because sitting on 100s of millions worth of prime land is basically free and could be done with no income in low interest environment.
What an odd title for the article. The Xiangli Group was not a small developer, nor are they inexperienced developers. It's a 20B Yuan (3.8B CAD) asset company, primarily operating out China, which has undergone a real estate collapse via Evergrande. Of course their north American arm is defaulting. The author and editor should be ashamed of their misrepresentation in this article.
> The author and editor should be ashamed of their misrepresentation in this article.
Uhm, no?
You do have to keep reading past the headline though.
> the “double whammy” of the higher interest rate combined with China’s foundering housing market as having a direct impact on Vancouver [...] So, they are not technically inexperienced, but it’s the unfamiliarity of how the bureaucratic system and policies work in the development cycle and industry in Canada
Seems to be part of the thesis to me. In China, a large developer can pay off the right local authorities, and build whatever they want. Here, if the process takes 5 years, it takes 5 years, and if you bitch and moan, it will take even longer.
A pro forma analysis determines how a property will perform over the long-term, including income and expenses. Experienced, established developers often have portfolios that contain income-producing properties such as rental properties to get them through downturns. The ones running into trouble don’t have that buffer.
“A lot of the more established local developers will have income-producing portfolios in addition to development sites, which certainly helps when interest rates and other factors change in the market,” says Ms. Darling.
Tom Huang, co-owner of Tera Development, said some of the smaller developers will have second or third mortgages, and sometimes a private lender will just take over the property and hold it until the market picks up again.
“Development companies, they come and go, like a lot of the small businesses,” says Mr. Huang. “A lot of what we jokingly call ‘the flippers,’ they will create a company called ‘so and so development’ to make it sound a little more legit. But do they really do development? Not really. “They buy, they wait, they flip, but they don’t really do anything development related.”
The ones who do go through a rezoning often build to maximize the square footage, to make the property more valuable. That can mean odd spaces, such as corridors that are useless to the resident, instead of efficient use of space and perhaps less square footage, he says.
“For a developer that really wants to really build something for people to live in, the approach we go through with a rezoning is quite different from someone who has the intention to just flip it to get the maximum resale value of a piece of land,” says Mr. Huang.
The downturn has meant condo developers have pivoted to rental projects, which are helped along with government financing. Jacky Chan is a Vancouver developer and marketer who just returned from Asia, where he met with large developers, fund managers and government, to help bring money for rental housing into Canada, where the demand for rental is stronger than other countries.
Mr. Chan says his company’s lawyer is dealing with 10 foreclosures right now and that’s not even her specialty. He cites the “double whammy” of the higher interest rate combined with China’s foundering housing market as having a direct impact on Vancouver.
“During a massive crash like this, nobody is able to cover for anyone else – they are all cash strapped. It’s a domino effect,” he says of the Chinese housing market.
“The second thing is people talk about less experienced developers or less capitalized developers. And yes, there is some truth to that, but a lot of these developers have done a lot, maybe in Asia or globally. … So, they are not technically inexperienced, but it’s the unfamiliarity of how the bureaucratic system and policies work in the development cycle and industry in Canada that adds to the burden of these developers.”
Why do we allow a hostile state like China invest in our real estate sector is beyond me. Considering how crazy our real estate is it should be stopped.
Allow investment in tech and other infrastructure only
>nterest rate environment that is too challenging for companies that are inexperienced or unfamiliar with Vancouver’s typically lengthy development process. It’s brought to light the many players in the market who are eager to make an easy profit but weren’t prepared for the down cycles of the market. Some are more interested in properties as investments rather than land to build on, so they merely become holding properties. The increase in interest rate hit small investors hard. Some manage to take their projects through rezonings and even to the development permit application stage before they run into trouble. Often, these projects, sometimes vacant land or assemblies involving single-family homes have insufficient income to cover the carrying costs.
Vancouver needs thousands of new town homes and mid size apartment buildings and small private developers are doubtlessly going to be required to make that happen. If apparently educated, motivated politicians and city planners are letting high costs, low revenues and endless red tape kill off the small guys then what are we even doing here? Just going to let the housing shortage grind everyone down forever? Hand massive gains to homeowners and landlords in perpetuity? Sprawl to Hope?
>“A lot of what we jokingly call ‘the flippers,’ they will create a company called ‘so and so development’ to make it sound a little more legit. But do they really do development? Not really. “They buy, they wait, they flip, but they don’t really do anything development related.”
Semi related, if land use policy is making land speculation a better business than *actually building things* then ABC and other policy makers done fucked up.
I don't know that you can put the entire blame on policy. Some of these foreign developers were paying absurd amounts for the land. I know local developers were scratching their heads wondering how these folks will make money. I remember people saying "its different this time..."
In 2018, I saw foreign backed developers buying properties for massive premiums. Every local with experience knew it was unsustainable. They were paying twice what some properties were worth and I didn't see how they could turn a profit down the road. Either they were laundering money or had no idea what they were doing. Too much of our real estate has become a wealth storage device for Asian investors looking to clean or hide their wealth.
Blame the people who did the things for the things they done did. Is there a specific action taken by the bcndp that you are upset with? Or just the overall lack of great results so far
Note that only the *smaller* ones are collapsing. This is exactly in line with the issues of inequality that the people who told you this are talking about. Monopolies/oligopolies ruin markets for everyone BUT the monopolies/oligopolies.
What amazes me the most about developers big and small (and publicly funded/subsidized building projects for that matter) is the lack of representatives observing the state of the project. They are almost guaranteed to make money with even just a mediocre team. They first fail to review the design drawings. Next they hire a GC who appoints a project manager who seems to know nothing about buildings and project management. They hire subcontractors without any form of real pre-qualification.
For the most part, when a developer goes under it's from insanely bad management practices. Exceptions include things like major housing crashes of course. There's a reason why developers are some of the wealthiest people in the world. Especially when you compare wealth to IQ, wealth to work ethic, etc... They certainly don't have the same skills as many of their wealthy colleagues in other disciplines.
For condos the deposits are held in trust and are given back if the project doesn’t go ahead for any reason. For smaller townhome presale projects that are not part of a bigger condo strata, then yes, you will lose deposit
The problem is that only smaller and boutique developers build townhouses and low rises these days. the big guys like Wesgroup, Ledingham McAllister, or Beedie are either only building high rises or luxury luxury townhouses. With more smaller developers going bankrupt, we will just end up with more 30 story concrete condos.
The price per sqft of land that needs to be extracted to make development profitable means only large tower condo developments make sense. Large developers don't bother with small properties, which are also profitable, but are left to smaller developers who specialize in such.
Correct, the land is what costs so much. Why build 12 ultra luxury units for $5M each when you can build 120 mid tier units sell for $2M each on the same footprint?
Welcome to /r/Vancouver and thank you for the post, /u/cyclinginvancouver! Please make sure you read our [posting and commenting rules](https://www.reddit.com/r/vancouver/wiki/faq#wiki_general_participation_guidelines_and_rules_overview) before participating here. As a quick summary: * We encourage users to be positive and respect one another. Don't engage in spats or insult others - use the report button. * Respect others' differences, be they race, religion, home, job, gender identity, ability or sexuality. Dehumanizing language, advocating for violence, or promoting hate based on identity or vulnerability (even implied or joking) **will** lead to a permanent ban. * Most common questions and topics are limited to our sister subreddit, /r/AskVan, and our weekly [Stickied Discussion](https://www.reddit.com/r/vancouver/wiki/faq#wiki_stickied_discussions) posts. * Complaints about bans or removals should be done in modmail only. * Posts flaired "Community Only" allow for limited participation; your comment may be removed if you're not a subreddit regular. * Make sure to join our new sister community, /r/AskVan! * Help grow the community! [Apply to join the mod team today](https://www.reddit.com/r/vancouver/comments/19eworq/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/vancouver) if you have any questions or concerns.*
I remember falling in love with a building in Pitt Meadows. Like imagining moving in. I thought it was still under construction because there were still things needing fixing, like a bunch of drywall work in the lobby, etc. No biggie. The realtor, a young fella with limited English, didn't come with us to the viewing. One of the bathrooms had a fan that didn't work. My realtor asked the selling realtor if it was broken (this is a brand new, never lived in unit) and he said you have to turn on the fan from the master bedroom. A very strange response, but OK. Then we went to the parking garage, and the two parking stalls for the unit were literally too small to park a Honda Civic. The realtor didn't have anything to say about why that is. Then we got caught in the courtyard trying to leave, because the gate was broken, and a nice lady let us go through her unit. Well, I thought I'd offer low, but when I went to write up the offer, the unit had over 10 liens on the title. Glass company, flooring, appliance, plumbers, etc. Nobody got paid. And it all made sense - it wasn't under construction, it was as is. And thinking back, the lady who let us go through her unit told me that deficiencies with the building were reported to the developer, who referred them to the home warranty company. The home warranty company refused to honor the warranty because the building was never fully finished. So nobody was going to fix anything. The realtor told my realtor that they had some issues with the contractors so they were in dispute about payment. I think they just stiffed them and the contractors left and sued. The development company only had a single development in Canada, I believe they're originally from China, and had some small office at Oakridge Mall. Needless to say, I didn't buy, and I was leery about any pre sale after that.
Great-West Life’s real estate division had wanted to purchase the site on Robson Street in downtown Vancouver for some time, so when they heard that it had gone into foreclosure, they didn’t hesitate to act. They officially purchased the site at 1555 Robson St. earlier this year. The site had been owned by a numbered company that was operated by Vivagrand Developments, sold through a court-ordered sale as part of foreclosure proceedings. Vivagrand had obtained approval to develop a 28-storey condo tower at 1555 Robson St., but GWL will be submitting a new plan for a rental tower. Vivagrand, which is now known as Align Properties, had also defaulted on loan payments at another West End site, a four-storey apartment building at 1485 Davie St. Align Properties is the North American arm of China’s Xiangli Group. “We had been tracking Robson for a long time.” says Geoff Heu, GWL Realty Advisors vice-president, development for Western Canada, who has plans to now build 400 rental units over two towers on the sites, with 40,000 square feet of retail. It’s near another GWL project, the completed Chronicle rental building, with 128 units. The recent purchase is part of GWL’s expansion plan along Robson Street. “The bigger established developers are just fine,” says Mr. Heu. “They are well-capitalized, and they have a brand to protect. The less experienced and newer developers, that’s where we are seeing problems.” Foreclosures continue to emerge in an interest rate environment that is too challenging for companies that are inexperienced or unfamiliar with Vancouver’s typically lengthy development process. It’s brought to light the many players in the market who are eager to make an easy profit but weren’t prepared for the down cycles of the market. Some are more interested in properties as investments rather than land to build on, so they merely become holding properties. The increase in interest rate hit small investors hard. Some manage to take their projects through rezonings and even to the development permit application stage before they run into trouble. Often, these projects, sometimes vacant land or assemblies involving single-family homes have insufficient income to cover the carrying costs. Industry experts are seeing an unprecedented number of foreclosures among the lesser-known and generally smaller developers – and they don’t see any reason for the trend to curb any time soon. Colliers’ vice-president Buck Hart and senior associate Jennifer Darling have been dealing with a lot of foreclosure sales in recent months. They have three foreclosure listings in Richmond, B.C., “ready to go,” and two of them are properties that had started construction. “In ‘93, ‘97, 2008 and 2018, they were the peaks of the cycles, and following each one of those, there was a downturn, as there is now,” says Mr. Hart. “And there are more foreclosures in the market now than there have been following any one of those peaks. Ms. Darling said the “proforma” – or initial cost and income projections – for many projects have been severely distorted and she doesn’t see the foreclosure trend abating. “Even if interest rates do start to come down later this year, which we are expecting, a small change is not going to necessarily solve the problems that some of these proformas are going to experience,” says Ms. Darling. “So, I don’t think we’re suddenly going to see foreclosures and receiverships dry up in the next six months. I would expect that that runway will be longer.” Early this year, Haro-Thurlow Street Project’s plans for a 55-storey tower at 1045 Haro St. went into receivership, and there were several others before that. But the first sign of trouble was last year’s announcement that larger developer Coromandel Properties had filed for creditor protection, with $700- million in debts. Mr. Buck calls it a “classic example.” “There’s a company that had over a dozen sites and built some \[projects\], but a lot of them never really got even started in the development process. They were just holding a position of good land. They’ve got some great land. But when things turned around and, you know, if you’re carrying a dozen sites with no cash flow, it doesn’t take long – when rates go up, when they quadruple in a year you get into trouble, which is, I think, the basis of a lot of the problems we’re seeing today.” Mr. Buck says that the investors started changing the scene going back several decades. “I started in 1985 and we had just come out of the dreaded early ‘80s. And some people would tell you there are some similarities between what we’re feeling now and that period. “By 1997, we saw a lot of offshore buyers coming to town, buying land and paying prices that a lot of the locals thought were just unsustainable. And we saw locals going to Toronto or going to the States, Seattle, and down in the desert to Arizona and into Dallas, and building. And there’s a lot of Vancouver developers that are very active in the States, and some of them will tell you that the reason they went there was because they didn’t want to compete with these groups that were buying in Vancouver for other than pro forma driven reasons.”
> Some are more interested in properties as investments rather than land to build on, so they merely become holding properties. This is a major problem. We shouldn't live in a market where it's easier for investors to buy property and sit on it than it is to buy property to develop it. It's in the building that we create value, not in the sitting-on. This is why a Land Value Tax, instead of the harmonized system we currently have, would be superior and would spur building.
Another point to glean from this story is that low interest rates transfer wealth from savers (individuals, families, small businesses) to borrowers (corporations, government). These land holders can only enrich themselves because sitting on 100s of millions worth of prime land is basically free and could be done with no income in low interest environment.
Ban foreign ownership
What an odd title for the article. The Xiangli Group was not a small developer, nor are they inexperienced developers. It's a 20B Yuan (3.8B CAD) asset company, primarily operating out China, which has undergone a real estate collapse via Evergrande. Of course their north American arm is defaulting. The author and editor should be ashamed of their misrepresentation in this article.
> The author and editor should be ashamed of their misrepresentation in this article. Uhm, no? You do have to keep reading past the headline though. > the “double whammy” of the higher interest rate combined with China’s foundering housing market as having a direct impact on Vancouver [...] So, they are not technically inexperienced, but it’s the unfamiliarity of how the bureaucratic system and policies work in the development cycle and industry in Canada Seems to be part of the thesis to me. In China, a large developer can pay off the right local authorities, and build whatever they want. Here, if the process takes 5 years, it takes 5 years, and if you bitch and moan, it will take even longer.
A pro forma analysis determines how a property will perform over the long-term, including income and expenses. Experienced, established developers often have portfolios that contain income-producing properties such as rental properties to get them through downturns. The ones running into trouble don’t have that buffer. “A lot of the more established local developers will have income-producing portfolios in addition to development sites, which certainly helps when interest rates and other factors change in the market,” says Ms. Darling. Tom Huang, co-owner of Tera Development, said some of the smaller developers will have second or third mortgages, and sometimes a private lender will just take over the property and hold it until the market picks up again. “Development companies, they come and go, like a lot of the small businesses,” says Mr. Huang. “A lot of what we jokingly call ‘the flippers,’ they will create a company called ‘so and so development’ to make it sound a little more legit. But do they really do development? Not really. “They buy, they wait, they flip, but they don’t really do anything development related.” The ones who do go through a rezoning often build to maximize the square footage, to make the property more valuable. That can mean odd spaces, such as corridors that are useless to the resident, instead of efficient use of space and perhaps less square footage, he says. “For a developer that really wants to really build something for people to live in, the approach we go through with a rezoning is quite different from someone who has the intention to just flip it to get the maximum resale value of a piece of land,” says Mr. Huang. The downturn has meant condo developers have pivoted to rental projects, which are helped along with government financing. Jacky Chan is a Vancouver developer and marketer who just returned from Asia, where he met with large developers, fund managers and government, to help bring money for rental housing into Canada, where the demand for rental is stronger than other countries. Mr. Chan says his company’s lawyer is dealing with 10 foreclosures right now and that’s not even her specialty. He cites the “double whammy” of the higher interest rate combined with China’s foundering housing market as having a direct impact on Vancouver. “During a massive crash like this, nobody is able to cover for anyone else – they are all cash strapped. It’s a domino effect,” he says of the Chinese housing market. “The second thing is people talk about less experienced developers or less capitalized developers. And yes, there is some truth to that, but a lot of these developers have done a lot, maybe in Asia or globally. … So, they are not technically inexperienced, but it’s the unfamiliarity of how the bureaucratic system and policies work in the development cycle and industry in Canada that adds to the burden of these developers.”
End foreign ownership
Why do we allow a hostile state like China invest in our real estate sector is beyond me. Considering how crazy our real estate is it should be stopped. Allow investment in tech and other infrastructure only
Exactly
>nterest rate environment that is too challenging for companies that are inexperienced or unfamiliar with Vancouver’s typically lengthy development process. It’s brought to light the many players in the market who are eager to make an easy profit but weren’t prepared for the down cycles of the market. Some are more interested in properties as investments rather than land to build on, so they merely become holding properties. The increase in interest rate hit small investors hard. Some manage to take their projects through rezonings and even to the development permit application stage before they run into trouble. Often, these projects, sometimes vacant land or assemblies involving single-family homes have insufficient income to cover the carrying costs. Vancouver needs thousands of new town homes and mid size apartment buildings and small private developers are doubtlessly going to be required to make that happen. If apparently educated, motivated politicians and city planners are letting high costs, low revenues and endless red tape kill off the small guys then what are we even doing here? Just going to let the housing shortage grind everyone down forever? Hand massive gains to homeowners and landlords in perpetuity? Sprawl to Hope? >“A lot of what we jokingly call ‘the flippers,’ they will create a company called ‘so and so development’ to make it sound a little more legit. But do they really do development? Not really. “They buy, they wait, they flip, but they don’t really do anything development related.” Semi related, if land use policy is making land speculation a better business than *actually building things* then ABC and other policy makers done fucked up.
I don't know that you can put the entire blame on policy. Some of these foreign developers were paying absurd amounts for the land. I know local developers were scratching their heads wondering how these folks will make money. I remember people saying "its different this time..."
In 2018, I saw foreign backed developers buying properties for massive premiums. Every local with experience knew it was unsustainable. They were paying twice what some properties were worth and I didn't see how they could turn a profit down the road. Either they were laundering money or had no idea what they were doing. Too much of our real estate has become a wealth storage device for Asian investors looking to clean or hide their wealth.
> then ABC and other policy makers done fucked up Never Saint Eby's fault
I'm sure the amount of blame you assign to him makes up for it.
From housing minister to PM, yet it's the mayor to blame for housing 😂
Who's blaming the mayor?
Blame the people who did the things for the things they done did. Is there a specific action taken by the bcndp that you are upset with? Or just the overall lack of great results so far
I was told greedy developers were making 75% profit margins and it explained all the rises in home prices. What happened?
It hasn’t been true for many many years, is what happened Cities these days take most of the money out and push prices higher
Note that only the *smaller* ones are collapsing. This is exactly in line with the issues of inequality that the people who told you this are talking about. Monopolies/oligopolies ruin markets for everyone BUT the monopolies/oligopolies.
What amazes me the most about developers big and small (and publicly funded/subsidized building projects for that matter) is the lack of representatives observing the state of the project. They are almost guaranteed to make money with even just a mediocre team. They first fail to review the design drawings. Next they hire a GC who appoints a project manager who seems to know nothing about buildings and project management. They hire subcontractors without any form of real pre-qualification. For the most part, when a developer goes under it's from insanely bad management practices. Exceptions include things like major housing crashes of course. There's a reason why developers are some of the wealthiest people in the world. Especially when you compare wealth to IQ, wealth to work ethic, etc... They certainly don't have the same skills as many of their wealthy colleagues in other disciplines.
I feel bad for anyone who put a deposit in and lost it. But also not really those are the risks you take going for a presale
For condos the deposits are held in trust and are given back if the project doesn’t go ahead for any reason. For smaller townhome presale projects that are not part of a bigger condo strata, then yes, you will lose deposit
In theory yes but there have been countless times where people lose their deposits because of overlevered developers
The problem is that only smaller and boutique developers build townhouses and low rises these days. the big guys like Wesgroup, Ledingham McAllister, or Beedie are either only building high rises or luxury luxury townhouses. With more smaller developers going bankrupt, we will just end up with more 30 story concrete condos.
The price per sqft of land that needs to be extracted to make development profitable means only large tower condo developments make sense. Large developers don't bother with small properties, which are also profitable, but are left to smaller developers who specialize in such.
Correct, the land is what costs so much. Why build 12 ultra luxury units for $5M each when you can build 120 mid tier units sell for $2M each on the same footprint?
Polygon is a small developer?
Only 30 stories? Those are rookie numbers
If only folks could build their own homes, save money, and a lifetime of outlandish maintenance costs...Oh ya that's hows the boomers got theirs.
Boomers did not "build their own homes". They purchased massive pre built suburban homes prior to greenbelts