1676 replies to this topic

[songheesguy]

Just got an email from the sales team of Hudson Place 1 offering up to $55k on 2br units. They are getting closer to what prices should be for that neighborhood.

[MarkoJ]

Just got an email from the sales team of Hudson Place 1 offering up to $55k on 2br units. They are getting closer to what prices should be for that neighborhood.

 

They've also upped the real estate commission to 3% across the board.

[CitoyenduMonde]

I'm far from being a real estate expert, but when we took a look here in July, we thought the prices were all very enthusiastic. I expect that there will be a number of people who will not be able to get a full value mortgage if they bought at full price before the recent price cut. Even with a $55K cut on the 2br it might not be enough.

[Mike K.]

I wouldn’t sweat it. People have to live somewhere, and construction costs are what they are.

[songheesguy]

I'm far from being a real estate expert, but when we took a look here in July, we thought the prices were all very enthusiastic. I expect that there will be a number of people who will not be able to get a full value mortgage if they bought at full price before the recent price cut. Even with a $55K cut on the 2br it might not be enough.

Totally agree. They called to ask if the price reduction had changed my mind on purchasing but I was honest and I think for that neighborhood 100k reduction would have me sold on a 2BR because that would be a fair price IMO

[Mike K.]

Are you able to point to a high-end condo project finishing in Victoria, and purchasers being unable to secure a full mortgage? When was the last time that happened? Has it happened? To whom and what were the circumstances?

Banks are not naive. Lenders are not naive. Victoria’s real-estate is not a boom and bust industry like it is in other markets, but if you think the market in Victoria is high-risk and banks won’t lend then you need to spend some time assessing real-estate markets and lending practices across this country where real-estate appreciates, at best, alongside inflation over the long term, and banks lend without any issues.

[Mike K.]

Totally agree. They called to ask if the price reduction had changed my mind on purchasing but I was honest and I think for that neighborhood 100k reduction would have me sold on a 2BR because that would be a fair price IMO

A fair price based on what, though?

The neighbourhood in which you live was an industrial dumping ground before condos started rising in the 90’s. People would do their oil changes atop the rise on which Bayview One sits. Vic West was considered a proverbial dump for generations and to this day many of Victoria’s old guard haven’t changed their tune, despite the major changes we’ve seen. And despite all of the changes all around the neighbourhood you’ve still got empty swaths of former industrial land waiting to be developed. How does that appear to an outsider? Is the perception negative or positive?

If you’re content with being surrounded by former industrial land that has remained undeveloped for decades, but you’re concerned a bank won’t lend the full value on a purchase at the Hudson, are you sure that your perception of the market is on point? Are you analyzing the market for what it is, along with the actual value of a home on the Hudson site, or is something you’re familiar with more valuable to you than something you’re less familiar with?

These are all important points to reflect on, as when you start down the road that banks won’t lend full value you should also be prepared to quantify those statements with more than just opinion.

[songheesguy]

A fair price based on what, though?

The neighbourhood in which you live was an industrial dumping ground before condos started rising in the 90’s. People would do their oil changes atop the rise on which Bayview One sits. Vic West was considered a proverbial dump for generations and to this day many of Victoria’s old guard haven’t changed their tune, despite the major changes we’ve seen. And despite all of the changes all around the neighbourhood you’ve still got empty swaths of former industrial land waiting to be developed. How does that appear to an outsider? Is the perception negative or positive?

If you’re content with being surrounded by former industrial land that has remained undeveloped for decades, but you’re concerned a bank won’t lend the full value on a purchase at the Hudson, are you sure that your perception of the market is on point? Are you analyzing the market for what it is, along with the actual value of a home on the Hudson site, or is something you’re familiar with more valuable to you than something you’re less familiar with?

These are all important points to reflect on, as when you start down the road that banks won’t lend full value you should also be prepared to quantify those statements with more than just opinion.

In my opinion the area is not prime enough to support the asking price because:

 

 the stretch to walk downtown to majority of pubs, shopping and eateries  is sketchy and yes I have done it after dark and there are some characters for sure.

 

There also is no neighborhood feel to it like humbolt valley (which is my preferred neighborhood for downtown core) or James Bay, no park areas nearby and the waterview isn't as close as Bayview/ songhees, Pearl, Customs House, Astoria. 

 

I honestly don't feel after GST that it's worth over $900++/ sqft and going by the amount of estate collection homes still available nobody else is rushing to buy them either. I feel the finishings are awesome but that location will be pretty cramped with all the development there.

[songheesguy]

In my opinion the area is not prime enough to support the asking price because:

 

 the stretch to walk downtown to majority of pubs, shopping and eateries  is sketchy and yes I have done it after dark and there are some characters for sure.

 

There also is no neighborhood feel to it like humbolt valley (which is my preferred neighborhood for downtown core) or James Bay, no park areas nearby and the waterview isn't as close as Bayview/ songhees, Pearl, Customs House, Astoria. 

 

I honestly don't feel after GST that it's worth over $900++/ sqft and going by the amount of estate collection homes still available nobody else is rushing to buy them either. I feel the finishings are awesome but that location will be pretty cramped with all the development there.

My post was specificly about Hudson Place One not Bayview  but I forgot to mention @Mike K I am not concerned about the ground my building was built on because I don't intend on growing a garden anytime soon.

[songheesguy]

My post was specificly about Hudson Place One not Bayview  but I forgot to mention @Mike K I am not concerned about the ground my building was built on because I don't intend on growing a garden anytime soon.

I never once mentioned anything about bank lending me money so not sure where that came from as it is a non issue.

[RFS]

In my opinion the area is not prime enough to support the asking price because:

the stretch to walk downtown to majority of pubs, shopping and eateries is sketchy and yes I have done it after dark and there are some characters for sure.

There also is no neighborhood feel to it like humbolt valley (which is my preferred neighborhood for downtown core) or James Bay, no park areas nearby and the waterview isn't as close as Bayview/ songhees, Pearl, Customs House, Astoria.

I honestly don't feel after GST that it's worth over $900++/ sqft and going by the amount of estate collection homes still available nobody else is rushing to buy them either. I feel the finishings are awesome but that location will be pretty cramped with all the development there.

That area will definitely improve pretty rapidly though and the nice thing about the location not being right downtown is easy access to Blanshard to get out of town quicker. Being next to the arena is kinda neat. You are right about parks but isn’t there a sorta mini park going in the courtyard area?

[Rulon]

 
I honestly don't feel after GST that it's worth over $900++/ sqft and going by the amount of estate collection homes still available nobody else is rushing to buy them either.

I think the people at Townline are starting to agree with you.

A fair price based on what, though?

Based on the market.. price reduction and greater incentive for realtors by a developer shows that the previous pricing wasn’t “fair” based on the current market condition.

[RFS]

So out of curiosity what happens to people who bought those units before at full price?

[Mike K.]

They’re not purchased yet so any changes on the developer’s side are pretty easy to introduce.

We still have to remember that HP1 has sold more inventory than most condo offerings in our region even have to sell. It’s a behemoth so Townline is pivoting just like any other developer would given the changes to the market. But I’d imagine they’re also an outfit that can carry inventory into the move-in-ready phase if the current market isn’t favourable to the cost of delivering the inventory.

The big question facing the industry is what interest rates will do this year and what the political landscape will look like. By year’s end we could have two different bosses in charge with different policies, and suddenly the market will rebound through a lifting of bad policy and a flat rate environment. Or we could see more of 2018 if we stay the same political course.

[tjv]

Are you able to point to a high-end condo project finishing in Victoria, and purchasers being unable to secure a full mortgage? When was the last time that happened? Has it happened? To whom and what were the circumstances?

Banks are not naive. Lenders are not naive. Victoria’s real-estate is not a boom and bust industry like it is in other markets, but if you think the market in Victoria is high-risk and banks won’t lend then you need to spend some time assessing real-estate markets and lending practices across this country where real-estate appreciates, at best, alongside inflation over the long term, and banks lend without any issues.

Is this truly a high end condo project?  I'm asking because I see the word "luxury" slapped on pretty much anything these days

 

We saw a lot of people walk away in 2008/09 from condo purchases in BC during the financial meltdown.  While we aren't expected to reach that level there today is no question we are entering a slowdown.  Of course with the new federal mortgage rules a lot of people are having trouble getting financing/refinancing, that's why my mortgage business is booming with rates at starting at 20%.

[Mike K.]

Absolutely it is. With the focus being on the end-user among Victoria's latest supply of condominiums the finishings have been pushed up and the quality is in-line with expectations at the given price points. Bellewood, Hudson Place and Capital Park are in the same league and all three offer similar product albeit with very different vibes (highrise vs lowrise, concrete vs woodframe, downtown vs periphery, ocean/city/mountain views vs city views, etc).

 

A market slowdown is also a deceptive term in that it is overtly negative. Will people slow down their need for housing? Are people slowing down their desire to move from a rental and into an ownership opportunity? Is the desire to move to Victoria from further afield slowing down?

 

Our market needs to breath, though. Construction costs are through the roof and the risks involved with selling product today but which won't be completed for 2-3-4 years – and given the on-going cost escalations – are tangible and a real concern facing many developers. A slowdown in this case is very much desired and may materialize as a significant benefit over the near-to-medium term.

[tjv]

Not disagreeing with what you are saying, but what happened in 2008/09?  Did people slow down their need for housing? (repeat all your questions)

 

The labour market crunch is easing, but I am generally not expecting construction costs to ease that much.  Multi family construction costs are always higher than SFH per sf.  Since SFH prices have escalated so much that construction market has slowed significantly, but multi family remains the only cheap option for many people so I think that market will remain although diminished from what we have seen

 

I am trying to keep a close eye what is going on in the background as 2019 unfolds

[Mike K.]

Not disagreeing with what you are saying, but what happened in 2008/09?  Did people slow down their need for housing? (repeat all your questions)

 

Developers weren't building and the population growth rate (demand for dwellings) was significantly lower, for sure. The rental vacancy rate septupled between 2008 and 2011 from 0.4% to 2.8% which also reduced pressure on moving from a rental to an owned residence, and rental rates were also much lower so the financially-based desire to jump from a rental into an owned home was not as pronounced.

 

In Victoria (2008 market crash notwithstanding) we have strong demand factors at play even in a less heated market (population growth; very tight rental market; high rental rates; job growth; secondary home desires; non-boom and bust economy), but we get so used to times of intense appreciation over a 4-5 year period (latest being ~2014-2018) that when there is a hint of values not appreciating at 10-15-20% during a pre-sale cycle that the market must be imploding.

[RFS]

Since SFH prices have escalated so much that construction market has slowed significantly, 

 

so SFH building costs have gone down?  What does it actually cost right now to build a basic, ~1700 sq ft, suburban 3 bed house?  

[tjv]

its simple, developers only build for demand AND if they can make money.  If that combo doesn't exist then they take their money and invest elsewhere.  Demand is slowing and sales falling sharply and are nearing number seen in the slow periods

 

Construction costs aren't falling, yet sale prices are.  Didn't we just see a 55k drop in an offer to make a sale on this forum?  Guess what, that money only comes from one place, the developers profit margin and nothing else