Quote:
Originally Posted by Cyro
Over saturation of the Osborne/Crescentwood area? I don't believe this area is having a problem with Condo Sales at this time, yet. Their is a great deal of activity in the area but it doesn't appear to have slowed down construction and sales of these units as of this time.
Other areas of the City, remains to be seen. I don't believe Winnipeg has reached an over saturation point as of yet. Time will tell of course when several large scale projects reach completion.
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Sales of these units have been difficult for everybody since day one. When these developments are put together, oftentimes the interested parties will put together a syndication and purchase units. Typically made up of the contractors, architects, etc., they'll buy units at pre-sale to get the development to a point where the bank will then finance the project so they can start collecting the real construction money. These are done through a joint venture separate from the development because the bank is keen to who is trying to push the sales. You'll have noticed this on the Pulse (474 River Ave.). The building was constructed and there were fifteen different realtor signs on the lawn post occupancy and they couldn't move the units. This is called a push. The objective is to move the unit for a more expensive price than was paid at the pre-sale price and ideally, never to take title. This, of course, has the ass-backwards effect of driving down the value of the condos bought by people intending to live in them. They don't care because they got their hefty margins on the construction and will take a hit on the back end of the unit. The building being built isn't indicative of a successful project if the values come down just after occupancy.
The Oz condos were averaging somewhere in the neighbourhood of 300 days on market per sale and 548 Stradbrook (that glass building) was forced to discount list prices by 25% to move the units.
The units that Walter was building were financed by money from China and haven't sold that briskly with units still available in nearly all their projects. That didn't stop them from promising significant returns, but I'm reluctant to believe they'll be able to deliver on them. Remember, interest is extremely expensive and these projects aren't high margin to begin with. If you're sitting on built, unsold units, it doesn't take long for the interest to consume your return.
Sandhu had also planned a project for River Avenue across from the Pulse. My understanding is that the project has now been converted to rentals at a much lesser build quality.
The area is softening up quite a bit. Whether this is due to significant cold over the past few months, only time will tell. There are still units available for people - quite a few, actually - and perhaps spring brings the buyers. We'll see, I guess....