Jeremy builds condos for a living. “For the life of me,” he admits, “I cannot envision who would choose to live in one of these buildings upon which I find myself working.”
Nice talk, eh? Give us more, condo guy.
“We have about seven crews in the field working on dozens of condo sites around the city (Toronto). Being on the ground, day by day, it becomes more readily apparent that the market is saturated with poorly built and seemingly non-thought-out condominiums. Every one I’ve worked on (except for one that’s being built with steel-frame construction) is the rebar-concrete-glass wall type. Reading your work makes me all that much more understanding (particularly in terms of the numbers of unsold units) of why this situation simply cannot last much longer.”
As this blog’s attempted to point out (but most ignore me), we’re on the verge of a condogeddon with the potential to pull down entire housing markets in Toronto, Vancouver, Calgary and those places in the flat middle part. Sales have crashed 50% in the GTA and are on a similar trajectory in most centres, as F’s anti-virgin measures start to take effect. The next shoes to drop are the demise of cash-back loans and stiffer borrowing hurdles, set to be law by the end of October.
But slapping brakes on hormonal young couples is just part of the problem. As condos shrink, prices escalate, capital gains fade and rents stagnate, investors are leaving in droves. Suddenly the source of 80% of unit sales is drying up. Developers, architects, project managers, contractors and real estate financiers are in a panic.
Now combine that with (a) an unstoppable surge of new projects coming to market at the worst possible time and (b) what Jeremy confirms – that most new buildings have the life expectancy of a Kia – and you have the fixings for a real estate implosion. The effect, of course, won’t end with those wobbly high rises. Horny virgins and idiot investors are the fuel for housing’s fire. And it’s fading.
But enough about condos and despair. Let’s talk about farmers, those happy, organic hayseeds whose amusing optimism in the face of crop failures, drought, frankenfood and artificial insemination is so inspiring.
So, farmer Lawrence, wassup?
“Dear Garth: My wife and I are young farmers in BC making a go of financial viability via vegetative fertility and old fashioned creativity.”
Vegetative fertility? Is that even legal in BC, Larry?
“We married recently, and I have been aware of the unfurling economic situation in this country for some time, but my woman, she is not so convinced. Success in her previous vocation has left her certain assets, among which is a $300,000 condo in Whistler, which has lost some value in recent years.”
Dude. Just a hunch. But calling her ‘my woman’ is not a turn-on, even for a farmer. And never, ever question her pre-nup decisions. They’re sacred. Men have died for less.
“She is under the mysterious impression that she must now cling and wait out what she believes is a temporary downturn until her condo/townhouse is restored in value and the selling of it can occur without injury to pride. The core of the problem – she is under the impression that to really know within a reasonable degree of probability what is going to take place within the real estate market in Whistler and Canada at large is an impossibility, because, well, there are so many “professionals” out there saying so many different things with certainty – so they must all be wrong, right? Or all right? From whence cometh discernment? Can you offer any assistance in the form of fact or insight which might give us the tap we need to do what must be done for the sake of protecting our new familia in the long term?”
Despite the fact you don’t sound like a farmer (‘whence cometh discernment’), and your wife made money while you diddled the veggies, you need to understand something about loss. Research has shown that people get twice as emotional about losing money as making it. We love a capital gain, but we’re fixated and obsessed by a loss. When an investment rises, we take credit. When it tanks, we blame the government. Or our spouse. So be careful.
Whistler’s been decaying since that Olympic thingy, and there’s more heartache to come as Vancouver unwinds. Many silly people borrowed against the fictional equity in their urban houses to buy property in a town nobody actually wants to live in. Now as the city melts, Whistler’s toast.
The Pathetic Tour
On that note, it’s time for some face time. By popular demand (my wife wants me out more), I will be speaking on the future of real estate, the messed-up world we live in, investment strategies and Amazon management over the weeks to come.
First stop is Vancouver, on the night of Monday, August 20th. The location will be a downtown hotel. The price is free, and totally worth it. Details and online registration will be available here on Monday. Strictly first come, first served. Unless you’re hot.