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Posted Mar 3, 2009, 5:36 AM
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Dérive-r
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Join Date: Mar 2006
Location: Vancouver, BC
Posts: 4,450
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I think this is the article Jared is talking about :
Quote:
Vancouver building permits fall with economy
But industry may be turning a corner, experts say
FRANCES BULA
From Monday's Globe and Mail
March 2, 2009 at 5:56 AM EST
VANCOUVER — Vancouver building permits - the sign of health in the local construction industry and an important part of the city budget - plunged in January to half the previous year's number.
Only 34 new residential units were built in the city that month, according to the finalized summary from the city's director of licences, Will Johnston, which was distributed to councillors late last week.
That grim news means that Vancouver is now projecting to get only half of its normal $25-million in fees related to development this year - a scenario that's being echoed to some degree in other Lower Mainland municipalities.
But Vancouver's finance committee chair and many people in the development industry say the region may be turning a corner.
"The February numbers will inform us more and so will March, but we may have seen the worst of it," said Councillor Raymond Louie, who is monitoring the numbers for signs that the city should tighten its budget belt even more.
There is a sign of hope: Development consultant Bob Ransford said the company he works for will be putting in an application to develop 900-1,300 units in Vancouver's Collingwood Village on the far eastern side of the city. That site, now single family homes that have been assembled by the Waterfront Group, would become part of the dense new neighbourhood that has been developed there over the past decade.
"We know it will take some time to get it approved, but they're optimistic that that the market will return," said Mr. Ransford. Although the company isn't making any construction commitments, even putting in an application requires paying significant fees to the city.
Mr. Ransford and others familiar with the development industry say they are hearing through the grapevine that there are signs of life in the housing market. More people are starting to appear at presentation centres and "people are writing deals," said Mr. Ransford.
The development company Amacon recently moved forward another step with its commitment to building a condo project at Homer and Smithe called the Beasley, which required a very large cheque for the city.
Al Poettcker, the head of the province's development industry association, said there are signs that sellers and buyers are beginning to come to terms with a new, lowered price for condos, at around $500 a square foot. In Vancouver, downtown condos had been selling, prior to the crash last year, for anywhere from $800 to $1,200 a square foot.
"There seems to be a bit of a bottom in prices," said Mr. Poettcker, who has been through six housing market crashes during his career. For the industry to really get moving again, though, he said, "it will take a better match-up of buyers and sellers."
For the past several months, developers haven't had a clear idea of what people are willing to pay, since most developers were reluctant to lower prices and, as a result, consumers simply sat on their hands.
But once the two sides establish a meeting point on prices, that will encourage developers to start looking at deals again, Mr. Poettcker said.
However, they may have to finance them differently. Many buyers are reluctant now, even at good prices, to make a commitment to a unit that might not be built for two or three years.
"The old model was pre-sales. But in a falling market, it's hard to get people to commit.
"We have to find another way to land developments than that," Mr. Poettcker said.
Developers may have to put in more of their own equity, something they had moved away from doing, or find interim financing while they are building.
"We have developers who are very well financed and who are ready to move ahead," he said.
Like many in the development industry, he believes B.C.'s real-estate market is fundamentally healthy. There isn't a lot of extra inventory and the economy is relatively healthy.
"The vast majority of us still have jobs," Mr. Poettcker said.
"There are a lot of people who are on the sidelines right now. They have down payments and they're waiting. As soon as they sense the prices are right they're going to step up."
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Frances Bula, The Globe and Mail
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I know there is a large empty plot just North West of Joyce skytrain station, but it is not large enough for that scale of a project.
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