SkyCity Centre Winnipeg | 45F | 575 Ft | 175.26 M | Cancelled - Page 31

Cyro · #**601** Posted **Jun 30, 2015, 7:27 PM**

Quote:

Originally Posted by Arts

shovels will be in the ground in the next few weeks.

Good luck.

jbird_1 · #**602** Posted **Jun 30, 2015, 9:54 PM**

The Negativity on this thread is annoying. I understand that there are some questions that need answering and until shovels are in the ground no one will believe CEOs or anyone, but lets just enjoy the fact that we might actually have a new 'tallest' skyscraper in the city until then.

Arts · #**603** Posted **Jul 2, 2015, 3:13 PM**

Quote:

Originally Posted by jbird_1

The Negativity on this thread is annoying. I understand that there are some questions that need answering and until shovels are in the ground no one will believe CEOs or anyone, but lets just enjoy the fact that we might actually have a new 'tallest' skyscraper in the city until then.

I don't think there is any unwarranted negativity on this thread. I think we all have positive opinions about the renders.

cheswick · #**604** Posted **Jul 8, 2015, 9:18 PM**

They switched out the signs on the graham ave lot last week. It now advertises the sales centre opening fall 2015.

CoryB · #**605** Posted **Jul 8, 2015, 9:40 PM**

SkyCity Centre is a great proposal for Winnipeg. There has been lots of valid concern though raised by many sources over how this developer has a history of making similar big promises in other cities and being very slow to move forward with them. I sincerely hope that is not the case here.

jbird_1 · #**606** Posted **Jul 8, 2015, 11:06 PM**

Quote:

Originally Posted by cheswick

They switched out the signs on the graham ave lot last week. It now advertises the sales centre opening fall 2015.

OakbluffMB · #**607** Posted **Jul 9, 2015, 2:34 PM**

Quote:

Originally Posted by CoryB

SkyCity Centre is a great proposal for Winnipeg.

I agree. I really hope it happens. I wouldn't be surprised if they sold 20 condos in the first month, but I wouldn't surprised if they sold 100, who knows. I'll check out the sales office for sure either way.

Simplicity · #**608** Posted **Jul 9, 2015, 5:19 PM**

Everybody can count the Chinese out. That's a huge market for the condo assignment market which is the only hope in hell this project would ever have.

OakbluffMB · #**609** Posted **Jul 9, 2015, 5:53 PM**

Quote:

Originally Posted by Simplicity

Everybody can count the Chinese out. That's a huge market for the condo assignment market which is the only hope in hell this project would ever have.

Wouldn't the fact that the markets are tanking there make it more likely that the Chinese would seek safe investments in North America?

Simplicity · #**610** Posted **Jul 9, 2015, 6:49 PM**

Quote:

Originally Posted by OakbluffMB

Wouldn't the fact that the markets are tanking there make it more likely that the Chinese would seek safe investments in North America?

During the best of times it's exceedingly difficult for the average Chinese to get money out of the country. It's virtually impossible right now.

CoryB · #**611** Posted **Jul 9, 2015, 6:52 PM**

I can't find a picture of the old sign to reference but pretty sure it used to say "starting from in the $200s" with smaller print hinting it was mid $200,000 as their starting point.

The new sign has similar language but the number has drop to $190 now. I wonder what tweaks they did to drop the unit costs.

Simplicity · #**612** Posted **Jul 9, 2015, 7:13 PM**

Quote:

Originally Posted by CoryB

I can't find a picture of the old sign to reference but pretty sure it used to say "starting from in the $200s" with smaller print hinting it was mid $200,000 as their starting point.

The new sign has similar language but the number has drop to $190 now. I wonder what tweaks they did to drop the unit costs.

The market tweaked. Has anybody actually been following the condo market as of late? We're talking about 20-25% dollar volume drops and the same for units.

OakbluffMB · #**613** Posted **Jul 9, 2015, 7:50 PM**

Quote:

Originally Posted by Simplicity

The market tweaked. Has anybody actually been following the condo market as of late? We're talking about 20-25% dollar volume drops and the same for units.

I don't follow it. Just looking at this now, so average price for condo was $239,000 last year and $243,000 in 2015, is that correct?

http://www.winnipegrealtors.ca/Resources/Statistics

cheswick · #**614** Posted **Jul 9, 2015, 9:28 PM**

Quote:

Originally Posted by CoryB

I can't find a picture of the old sign to reference but pretty sure it used to say "starting from in the $200s" with smaller print hinting it was mid $200,000 as their starting point.

The new sign has similar language but the number has drop to $190 now. I wonder what tweaks they did to drop the unit costs.

The previous sign said condos (from the, in small print) $200's.

Simplicity · #**615** Posted **Jul 10, 2015, 4:48 AM**

Quote:

Originally Posted by OakbluffMB

I don't follow it. Just looking at this now, so average price for condo was $239,000 last year and $243,000 in 2015, is that correct?

http://www.winnipegrealtors.ca/Resources/Statistics

I'm not really sure where you're getting those numbers. Using your link and paying attention to the condominium statistics:

Dollar volume from Q12015 is down 17.3% to $67,575,278 from Q12014 of $81,749,209. Unit volume is down 20% w/ Q12015 at 284 units sold vs. 355 in Q12014.

Dollar volume from Q22015 is down 14.11% to $126,279,038 from Q22014 of $147,022,231. Unit volume is down 14.33% w/ Q12015 at 520 units sold vs. 607 in Q12014.

And this is only counting resale and any new (including pre-sale) units listed on the MLS which isn't that common. When you look to the data on new construction which is available for up to the beginning of June, absorptions are down 40.7% YoY. Completed and unabsorbed - read: added to unsold inventory - are up 118.9% in the semi-detached and row category and up 93.9% in the apartment-style category YoY.

Condos are getting killed in this city at the moment. I have conversations with banks all the time working to get projects financed. The lending standards are tightening up, they're asking us to kick more equity into projects, they're demanding more and more pre-sales, and they're getting antsy about appraised project values. I also have numerous realtor contacts who have begun to refer to the resale condo market as 'crashing'. Of course, that's all strictly anecdotal, but the data holds up. We're only a few days away from being able to include June's data in those numbers from above. my guess is that it looks just as bad. Thankfully starts have finally started to slow even though year-to-date totals are still slightly up from last year. Based on absorption rates, it's going to take a solid 8 or 9 month period to get caught up and we'll be heading into the winter months. Prices are going to keep getting cut 'cause it's the only way.

buzzg · #**616** Posted **Jul 10, 2015, 2:45 PM**

A huge part of it has gotta be from the big condo boom we've had the last few years, it's gonna crash eventually. Especially if you look at all the conversions to condos, many of the apartments that were prime (or not) for being converted did, so that inventory is drying up as well. Just look at Corydon as an example of this.

Pegoise · #**617** Posted **Jul 10, 2015, 2:59 PM**

Conversions are way down in the last year, not sure if its because owners have clued in to the softer market or if they are slowed down by the need for a reserve study in order to sell. (Suddenly buyers need to know what they are getting maintenance-wise with these old buildings)

Simplicity · #**618** Posted **Jul 10, 2015, 3:45 PM**

Quote:

Originally Posted by buzzg

A huge part of it has gotta be from the big condo boom we've had the last few years, it's gonna crash eventually. Especially if you look at all the conversions to condos, many of the apartments that were prime (or not) for being converted did, so that inventory is drying up as well. Just look at Corydon as an example of this.

Yeah, definitely. Concerning is that a lot of those units are purchased as investments. People buy them strictly to rent out. When they start reflecting negative carries, they get put back on the market. It's the reason that lenders should be paying attention to sales within arm's length and investors (including assignments) versus those who are going to actually live in the unit. End user purchasers are good because a financial loss doesn't necessarily equate a loss of utility. But an investor who sees a sunk cost will seek to extricate himself quickly and this is a large reason the new construction market is as bad as it is. There are completed and unoccupied units for sale by investors in projects where the developer is still sitting on unsold units and they're all competing for the same few buyers. That's enough to kill a project given the profit centers are usually the last 2 or 3 units even on a big project.

So at the end of the day, leaving aside that Fortress isn't taken seriously by anybody as a developer who could ever actually manage a project like this through, there's the entire issue of there being no market for it. Not now, anyway. And likely not for many years. All you have to know is that Glasshouse is offering cash-back developer incentives at the moment. That doesn't happen when there's a market for 350 units.

esquire · #**619** Posted **Jul 10, 2015, 4:21 PM**

Quote:

Originally Posted by Simplicity

Yeah, definitely. Concerning is that a lot of those units are purchased as investments. People buy them strictly to rent out. When they start reflecting negative carries, they get put back on the market.

Why would someone in that group sell now and potentially lock in a loss? The rental market is still pretty good... what's the downside to sitting on a unit, keep cashing rent cheques, and wait for things to improve?

Simplicity · #**620** Posted **Jul 10, 2015, 4:35 PM**

Quote:

Originally Posted by esquire

Why would someone in that group sell now and potentially lock in a loss? The rental market is still pretty good... what's the downside to sitting on a unit, keep cashing rent cheques, and wait for things to improve?

Well, negative carry means that you're subsidizing your renters month-to-month. Unless you think there's a ton of capital appreciation underneath that's yet to be revealed, that's not an investment; that's just hemorrhaging cash. The rental market is quite a bit weaker than most people think. Especially at the high end which is where condo rents tend to be given all the costs. Add to that the reality that X number of units in the building are also for rent and the rates will fall even further. Toronto is experiencing this at the moment. On one project the developer is guaranteeing rental rates of $2200 a month for the first two years on market rates of about $1700. It's effectively a $12,000 cash incentive to the purchaser (or more if they can't fill the unit at market) but it makes the building's cap rate look better than it is. And it's only being offered because hundreds of these units hit the market at the same time after occupancy takes hold.

The other thing about assignments (or 'pushes') is that often the purchaser isn't interested in being an owner and a landlord. They just want the difference in the pre-sale and fully-constructed price. They didn't want possession in the first place, but were forced to take it when they couldn't move it during construction. This is often why you'll see a pile of realtor signs in front of a newly constructed building. And this is when the real costs start hitting you. Closing, condo fees, etc. It's not part of the plan.

So if the plan is for everybody to buy units in SkyCity for rent and they start in the 200's (or 190's), then you're talking about having to achieve like $2.75-$3/psf rents in Downtown Winnipeg to hurdle the build cost and give purchasers a positive carry on their investment. Does anybody believe that's possible in Downtown Winnipeg? Nobody's ever done it.