Canada's Housing Bubble

Analysis of the real estate bubble in Canada --

‘Hot-market’ pitch disputed Print E-mail

Sep 24, 2010 Tracy Holmes Peace Arch News

Developer selling units at 35% off 2006 presales price

A South Surrey developer “cornered” into offloading unsold inventory at below-market prices says consumers are being misled to believe the housing market is stronger than it really is.

“In contrast to this situation, which is clearly indicative of a sagging market, realtors… are blogging about how ‘hot’ the market is,” reads a statement issued Monday by Watermark Developments.

“Some realtors are putting the wrong perception out there,” explained Salome Sallehy, hired to help facilitate a sale this weekend at Watermark’s 2970 King George Blvd. project.

“Inventory is just not moving because the market isn’t willing to bear those prices. Developers aren’t really acknowledging that.”

At least one industry expert disputes the claim the market is sagging. While Greater Vancouver Home Builders’ Association’s Peter Simpson acknowledges the market isn’t as strong as it had been in recent years, housing starts are double what they were a year ago, he said.

“I’ve got a laundry list of developers that are launching new projects this fall. They’ve got a lot of confidence in the market,” Simpson said.

Watermark will offer 37 units for sale at noon Saturday, with prices ranging from $199,000 to about $320,000. The one- and two-bedroom units have sat empty since construction finished a year ago, and comprise almost half of the development, Sallehy said. The prices represent a discount of about 35 per cent off of what the units were sold for during pre-sales in 2006, Sallehy said.

While Simpson criticized the way the offer is being marketed – saying the language of the news release “smacks of bitterness” – he said if the homes are sound, it may be a good opportunity for first-time home-buyers.

“If these are good prices in a good location, that’s one thing,” he said. “The buyer needs to do their homework to investigate the track record of the builder.”

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