Quote:
Originally Posted by officedweller
I think the point is that for market condos, in the event of a depressed market (as we are in now), the CACs establish a floor for cost recovery that prevents market pricing from being lowered.
Yes, developers won't voluntarily give up profits if the market is high, but the CACs appear to have the effect of shifting the breakeven point to a point where affordability is impossible (even if the developer wants to do so).
By reference, I cringe at the CAC cost in Vancouver now, because my 1994 condo purchase (resale near Yaletown in a down market) was at $217 per sq ft. (the original HK buyer had paid $281 per sq ft and took a loss).
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I'd say it depends on what you think you can get in the market at that time, mixed with how much you paid for land. Lots of folks bought land recently and need to recoup. Others that have had their land for a long time (discounted land) and maybe get some lucky density either outright or rezoning, why would they market units for less? If the market says $x for a 2-bed in east van I swear it'll re-sell to an "affordable" rate in this market anyway.
Then there's the low density aspect of this city that doesn't allow (for the most part) fourplexes, at least, or the ability to redevelop without the City forcing a local family developer from doing a land assembly. This happens all. The. Time. A decent-sized lot that could accommodate an apartment is forced to buy the neighbouring lot. = no redevelopment until a big company buys everyone out for a premium = expensive condos. Generally and anecdotally speaking.