February 18, 2016

Some Buyers Seem To Have Unlimited Money

Bloomberg reports on Canada. “The pain in Canada’s oil patch is extending to one of the country’s biggest real-estate magnates. Lamb Development Corp. is delaying construction of two condominium projects in Alberta as the slump in the price of oil guts jobs and housing demand. ‘The situation in Alberta is worse than 2008,’ said Brad Lamb, known as Toronto’s condo king. ‘This is a unique event that is annihilating anywhere in the world that produces oil.’”

“Lamb is pulling back as condo sales in Calgary and Edmonton posted the steepest decline in 2015 since the financial crisis. Lamb’s other projects in the province are forging ahead, including the Orchard, a two-tower condo complex that starts construction this fall, and 6th and Tenth, a 31-story tower that’s under construction with buyers slated to move in March 2017, Lamb said. Both are in Calgary.”

The Calgary Sun. “Calgary’s sagging rental market is opening up new affordable housing options, but challenges still persist for the city’s working poor. ‘Things have changed dramatically because of the downturn, with layoffs, people leaving the province and a much slower in-migration of people coming here,’ said Gerry Baxter, spokesman for the Calgary Residential Rental Association. ‘There’s a lot of empty units, so it’s very much a tenant’s market right now.’”

“Baxter said with vacancy rates as high as 15% to 20% in some downtown buildings after an exodus of laid-off oil workers, landlords are doing whatever they can to attract tenants.”

From Global News. “A growing number of incentive-laden apartment ads are leading some to question whether Edmonton is finally becoming a renter’s market again. ‘We decided to do the one month free rent – which is amortized over 12 months,’ said Trina Ryan, a property manager with 15 years of experience. ‘There’s lots of competition… because we have three buildings that are opening. Plus, we know there are lots of other companies out there that have new buildings opening. This is the worst I have ever seen the industry.’”

The Daily Herald Tribune. “While news is circulating that some people in the province are packing up their things, mailing their house keys to the bank and leaving their mortgages, that’s not necessarily a ‘trend’ seen locally. John Krol, president of the Grande Prairie and Area Association of Realtors, said there are a few cases of repossessed houses on the local market but he wouldn’t necessarily call it a trend. Some of the reasons for former residents giving up their home in the Swan City could be attributed to job loss.”

“‘It’s no secret there’s been a lot of layoffs or they’ve taken huge wage cuts and if there are job opportunities somewhere else, they’re going. We’re seeing that among tenants too. The vacancy rate among tenants is rising as well,’ he said.”

From CBC News. “Evidence of Fort McMurray’s new reality is everywhere. Once-packed restaurants and hotels have cleared out and work at downtown construction sites has come to a standstill. For Sale signs have sprouted like weeds in residential areas. Salvation Army director Major Stephen Hibbs said many clients came to Fort McMurray to better themselves and create stable lives for their families, but now their savings are depleted and they’re liquidating to pay the bills. ‘The reality is, that’s where a lot of people are at this point,’ said Hibbs. ‘Your heart bleeds with them.’”

“A local Facebook page called YMM Helping Others has become a lifeline for an increasing number of people in need of baby items, food, clothing and other supplies. Kristin Burhoe started YMM Helping Others two years ago to help struggling families over the holidays. More recently, she recruited help just to keep up with demand, noting many are struggling because of cuts to overtime. ‘Now we have requests every day for someone that’s hard on their luck,’ said Burhoe, adding many are families with young children. ‘A lot of people are asking for bottles just to help pay the mortgage or the bills.’”

From CTV Vancouver. “The flyer Charlie Kiers mailed out to Vancouver homeowners isn’t exactly subtle, but then, it’s not supposed to be. ‘Truth in advertising,’ Kiers said of the mailing, which boasts that his RE/MAX Metro Realty is ‘the Chinese Buyer’s Connection’ and can get sellers extra money for their properties by selling to foreign buyers. ‘Yeah, it’s reality,’ he said. ‘I wasn’t trying to be negative in any way, I was just trying to be realistic and just trying to offer my services for them to get the most money for their home.’”

“Kiers is hardly the only real estate agent making the case to local homeowners that they should sell to buyers from outside Canada. Flyers from lots of different companies have been hitting local mailboxes in recent months, as the average price of a detached home in the City of Vancouver soared past $1.8 million. There’s no question that people who live in the city are hurt by the superheated market, especially when some buyers seem to have what Kiers called ‘unlimited money.’ ‘If there’s more than one buyer putting an offer in on the property, then only one buyer’s going to win,’ Kiers said. ‘Whoever has the most money is going to buy the place.’”

Bits Bucket for February 18, 2016

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