Sacrificial virgins

A few months ago a brand-new condo owner in Toronto’s sexy distiller district saw her balcony explode. Seconds later hunks of tempered glass were raining down on the hopelessly-trendy streets below. Hours later a city building inspector ordered the property maintenance company to replace the glass – with more of the same glass. Duh. Days later City Council passed a motion forcing buildings to be checked for kamikaze suicidal balconies and come up with a long-term solution.

Add one more nail to the condo coffin. Do all those new owners have any idea where this is headed?

“Tempered glass is the standard of the industry,” a spokesman for the developer said at the time. “ It’s been that way for 23 years. It’s come off buildings in the past but it’s never been a newsworthy event.”

Well, times have changed. And the issue is not just acres and acres of glass cladding scores of Toronto high-rises. It’s also glass-wall construction with short-life seals, questionable quality cement, slap-dab plastic tube piping, plus condensation and mold. Not just Toronto, either. In recent weeks condo owners in Alberta have made headlines complaining about deck drainage mistakes, windows set improperly, leaking roofs and wafer-thin stucco.

As Calgary architect Tang Lee says, “It’s not going to fail in the first couple years, but it will fail five, 10 years, 15 years down the line.”

Why is this happening, and what does it mean for the broader real estate market?

Demand for multi-unit housing – condos – has never in history been higher. Right now Canada’s the condo capital of the world, with Toronto its epicentre. The reason’s simple: cheap money and lax lending standards pushed real estate prices past the point of affordability. A generation ago young couples would buy ‘starter homes’ – 900-square-foot bungalows on suburban lots. Today those places can command a half million dollars or more, forcing first-time buyers into boxes in the sky.

As a result, there are now 55,000 new condos under construction in the GTA alone, and another 31,000 being marketed and sold. But the construction industry can’t keep pace, turning out only 15,000 units in 2012 – and doing that at a breakneck pace leading inevitably to shortcuts and efficiencies. Meanwhile as sales slow, banks exit financing and prices ratchet back, developers find their margins thinning. Wouldn’t you want to cut a few corners?

So not only are purchasers waiting a long time – as much as four years or more – to get what they paid for, they’re often buying into buildings which could deliver some nasty surprises. Replacing the glass skin on a 35-storey tower, for example, could take a year and cost several million dollars – with every penny coming out of condo fees and special assessments against the owners. If they chose not to pay, they’ll face legal action, and be unable to sell their units until it’s resolved.

How many of those property virgins, shunting into their mortgaged 500 square feet, know that?

According to a new survey this week, not many. When TD asked condomaniacs in Toronto, Montreal, Calgary and Vancouver about condo (strata) fees, almost 70% said they had no idea these things could actually go up. And they certainly can, especially if you move into a new building with no history of establishing reserves against major work.

Scarier still, the bank found about 40% say they “have no confidence” they could actually afford to pay an increase in those monthly charges. Note: that is any hike in fees, let alone a bill for ten or twenty thousand dollars that could arrive in five years when the glass goes Bruce Willis or the parking garage starts leaking.

This is what happens when people without savings, investments or actual money are allowed to buy high-rise units they should actually be renting. Human nature, greed and naiveté being what they are, most of these kids (and amateur investors) mortgage to the max, leaving nothing in reserve. If you were worried what might occur in two or three years when mortgages reset at higher levels, the news that four in ten can’t afford $30 more a month in condo fees should terrify. Especially given the trendy junk they’re moving into.

It seems certain the rush into these cement rabbit warrens will look like a poor decision in the years to come. A lot of people are on the verge of losing all their equity, first to Mr. Market, then to the hype and avarice which led them there.

Exploding balconies we could probably handle. Imploding virgins, not so much.

158 comments ↓

#1 james on 11.29.12 at 9:49 pm

garth, you pulled out a tang lee quote, good for you. next time you are out here we’ll all go for lunch, my treat.

and when are you coming to calgary? visiting in time for the holidays?

#2 smarter than terry on 11.29.12 at 9:50 pm

imploding virgins! sounds like something I might want to see?

#3 steve on 11.29.12 at 9:51 pm

My parents left a condo some 12 years ago …when they bought they were lured with the low condo fee sales pitch …as time went on the building did in fact need major work ..thus driving the condo fee so high they had to move on …..

#4 Lily joe on 11.29.12 at 9:55 pm

The builders, banks and condo realtors should be ashamed of themselves for preying on their naïveté.

#5 T.O. Bubble Boy on 11.29.12 at 9:56 pm

The scariest part is that thousands upon thousands of “owners” that apparently can’t save even $30/month were approved and insured by the robo-signing wonder that is CMHC.

All taxpayers are on the hook for these sketchy condos.

#6 Country Girl on 11.29.12 at 9:58 pm

The 4 in 10 who can’t afford $30 per month more in Condo fees better hope for a mild winter because heating costs could fluctuate by this amount; same with air conditioning in summer months.

#7 Nodebt on 11.29.12 at 9:59 pm

4th!!!!

#8 Country Girl on 11.29.12 at 10:01 pm

For Smoking Mans and his fans:
Aoccdrnig to rscheearch at Cmabrigde uinervtisy, it deosn’t mttaer waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteres are at the rghit pclae. The rset can be a tatol mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae we do not raed ervey lteter by it slef but the wrod as a wlohe.

#9 Adam on 11.29.12 at 10:01 pm

I’m starting to see an increasing amount of friends and colleagues getting squeezed after landing these monster mortgages. It’s sad that it could ruin relationships. But herein lies the “risk” of the whole risk reward theory. It’s hard to quantify the impact this stuff can have on a relationship. I guess all I’m saying is maybe we all need to be a little more diligent I’m our finances and realistic I’m our expectations.

#10 Maxamillion on 11.29.12 at 10:01 pm

These are some the issues in a 10 yr old condo I live. Two parking ramps were redone at a cost of 100k, the heating coils weren’t working properly to melt ice and leaking. Waterproofing on parking garage floors needed repair (common problem to due wear) Front entrance of the building sidewalk sunk 6 inches, since they decided to fill will dirt instead of gravel. Drainage issues around tennis courts requiring drain pipes installed. Water pipes developing pins holes always a problem. Hallways were renovated (10yr old building) since the boomers who live here want new wallpaper before they die. In my unit drywall tape was visible in many areas and the walls looked like a bomb exploded. Backups in the kitchens on the second floor units are a problem. These are just some of the problems and that’s why you can’t avoid the silent killer in condo living, the maintenance fee. Have to go fire alarm ringing again, usually went off 3 times a day, twice a week until repaired.

#11 Adam on 11.29.12 at 10:02 pm

I’m should read “in”

#12 DaleFromCalgary on 11.29.12 at 10:02 pm

Already been happening for years in Calgary. A huge particleboard and stucco complex in Edgemont, built in the late 1980s, cost its tenants about $30,000 per unit for new exteriors in the early 2000s. Bear in mind that Calgary has a dry climate. Humidity is never mentioned in radio forecasts, and sometimes goes to near zero.

Currently there are hundreds of two-storey infills being built in older neighbourhoods, and ten times as many five-storey complexes out in the boonies. All are built out of lowest-cost particleboard and 3 mm of stucco, mostly put together by apprentices and unskilled handymen.

Cowtown is Time Bomb City.

#13 mr-b on 11.29.12 at 10:06 pm

Great blog Garth!

As a race, we’re just getting dumber aren’t we?

I’m starting to think that Idiocracy was a documentary. Can’t wait to see condos duct taped together to keep em from falling down. /sarcasm

#14 Fabrega on 11.29.12 at 10:10 pm

Canadians are being ripped off by developers and realtors.The quality of 90% of the buildings-and I include houses- is criminal. They should be ashamed to call themselves builders.Bunch of thieves they are.

#15 Crashing yuppy on 11.29.12 at 10:14 pm

The upcoming toronto condo crash will be one for the ages! Areas like CityPlace and Distillery will be the next St Jametown. Only difference is St James was built to last for a century. New condos will last a few decades

#16 Inglorious Investor on 11.29.12 at 10:16 pm

Geeze, there’s been a lot of talk about a condo collapse on this blog, but I never took it literally!

#17 Canadian Watchdog on 11.29.12 at 10:16 pm

Previous Post #132 Suede

So you’re saying they’re using monopoly money to look good?

Derivatives in layman’s terms: You own a home, you have insurance, if your home burns down the insurance company must pay you the full value you are covered for. That’s normal.

In the derivatives world: You own a home, you have insurance, but now the insurance company can sell insurance to investors on your home for a premium. This is a derivative product which is basically a contract derived from or referenced to the value of an underlining. Now what happens when your home burns down? The insurance company must pay everyone.

Now imagine banks doing this with client assets and your deposits.

I’m curious if you have a contrary viewpoint that proposes solutions or ways of doing things differently than what CMHC, OSFI, RBC etc… currently do.

The first place to start is dealing with corruption: OSFI’s consumer protection mandate was amended in the OSFI Act some years ago, therefore, their current mandates are to regulate FRFIs and maintain investor and depositors’ confidence in these institutions. Secondly, there needs to be ‘rules’ reinstated as they were in the early 1990s to make sure banks and insurers are following the ‘law’, not guidelines.

As stated in Akerlof and Romer’s paper: if the reward is greater then the risk (mathematically and by law), then the incentive to engage in fraudulent lending schemes for high profits greatly increases.

This is the root cause of every crisis.

#18 Unhappy House Hunter on 11.29.12 at 10:17 pm

I’m a 20 year tradesperson servicing basebuilding equipment(not in suite),any building I service/repair that is yonger then 5-7 years are so poorly built and engineered it is pathetic. The equipment/materials are for the most part poor and the workmanship weak and rushed. This is great for service techs but not so good for maintanance fees.I would honestly never buy a condo!

#19 Molson Ukrainian on 11.29.12 at 10:19 pm

Another great post Garth. It’s tempting for us younger folks to buy into the lifestyle and prestige of new and sleek condo towers on trendy streets. Reality checks by the wise and experienced are a warm welcome.

I almost purchased here 2 years ago, feel sorry for those that did…

http://www.cbc.ca/news/canada/edmonton/story/2012/10/31/edmonton-condos-gates-repair-bill.html

#20 Mississauga on 11.29.12 at 10:21 pm

The end is near…

Mortgage insurance levels drop 37% in third quarter, CMHC reports

http://ca.news.yahoo.com/mortgage-insurance-levels-drop-37-third-quarter-cmhc-235833801–finance.html

#21 Tim on 11.29.12 at 10:21 pm

Most condo owners I know in the Lower Mainland have had special assessments for leaky condos. So many of them are shoddily built with cheap materials and many of the workers are poorly trained. I wouldn’t touch those things with a ten foot pole. As far as condo fees, when do they ever go down? They always go up…

#22 Form Man on 11.29.12 at 10:22 pm

consider a possible method to the madness……… when the condo craze is over, the unemployed trades can re-invent themselves as ‘building envelope specialists’, and be busy for years…….

#23 Neil on 11.29.12 at 10:22 pm

Then there are the elevators. There is a 3-year-old condo in Ottawa where the elevators are failing and the company that made them has pulled out of Canada.

“Residents of a three-year-old condominium tower at Bank and Laurier streets are pretty testy these days, waiting and waiting for any of the three building’s problematic elevators to arrive.

Smythe fears the three elevators might eventually be deemed lemons and need to be replaced, at great cost to condominium unit owners. Another worry, if the problem persists, is property values. Who wants to live in a highrise with persistent elevator breakdowns? There have already been problems with loose glass panels in the building. One panel on a 10th-floor balcony shattered last June, sending shards of glass onto lower balconies and the street below. ”

http://www.ottawacitizen.com/business/Hugh+Adami+Condo+residents+down+faulty+elevators/7623585/story.html

#24 Vincent HRD on 11.29.12 at 10:23 pm

Purpose-built condos are being designed and built down to a price, rather than up to a low-maintenance level of quality construction. When a savy developer pulls together his design team, they are very aware of what systems, finishes and fittings will last 1 – 3 years and what will go the distance. Those costs are just being passed on to the new/future owners. In the early days of condo/rental conversions, many rental buildings were actually better built than what is being thrown up today. Developers should be ashamed.

#25 LJ on 11.29.12 at 10:25 pm

The poor quality construction in Calgary has been a problem for ages. You would be a fool to buy anything built in 1980 or newer. The tragedy is that a lot of the older solid houses are being torn down and replaced with cheap “faux-houses” that will need MAJOR repairs in a couple of years. I could show you examples, in a dry climate, of stucco work that is 2-3 years old and has such severe water staining that it should be replaced, and many of these million dollar plus houses are still ‘new builds’ (ie. haven’t had an original owner yet – except the builder of course). Never mind the Chinook winds that can tear off poorly installed shingles that have been on less than a year…

And, why isn’t anybody talking about the constant stream of foreclosures still hitting the market in Alberta?

#26 Canadian Watchdog on 11.29.12 at 10:31 pm

#20 Mississauga

CMHC and Genworth are just saving some insurance capacity to get through spring season. After that we’ll see the system starting to crack.

#27 Unhappy House Hunter on 11.29.12 at 10:37 pm

#24 is right ,hi end rentals are usual better built and higher qualty +more energy efficient

#28 periwinkles on 11.29.12 at 10:43 pm

Profit per square footage is what its all about. Same old thing – scrimp on materials. Done all the time asphalting roads. Bid lowest and cut corners for profit margin.

#29 Bo Xilai on 11.29.12 at 10:44 pm

Tagline for most developers:

“Building Tomorrow’s vertical concrete ghettos… Today”

#30 Madame Guillotine on 11.29.12 at 10:46 pm

Hate to be pedantic (not really) but please learn to differentiate between cement and concrete.
Cement is what binds the aggregate to form the concrete.
So endeth the lesson.

You have concretely cemented it. — Garth

#31 GTARealEstateCorner on 11.29.12 at 10:53 pm

Watching the Toronto real estate market is an interesting past time indeed. From the maniacal spring ’12 to the sudden slowdown in fall’12. History will show that it gets way more interesting from here on in. The winter of 2012 will be cold and the Spring ’13 will show a Year over year decline of 7% – 10% from the previous year. And yes, I’m referring to 416 detached too.

#32 Lost Soul on 11.29.12 at 10:53 pm

I just do not get the whole condo thing Years ago it was deemed an affordable alternative to a real home, you know back in the day when they cost 35 grand plus a pop.
Why would anyone even consider paying what in some cases is as much or more than many single family homes, not to mention the $6000.00 a year in fees and taxes plus(before mortgage payments) on a 700 square foot tomb?
Its the after tax dollars in monthly fees that really scare me. Now add in the future rise in condo fees for shoddy workmanship…what a disaster. Suppose nobody paid much attention to all those blue tarps on buildings on the coast over the years.
I remember distinctly a young couple in Saanich BC with a new baby that pretty much got wiped out when their condo needed retrofitting in the 1990’s
Amazing these builders are not charged with fraud …seems very similar to any other financial scam! But no they pop up with a new numbered company and carry on.

#33 Inglorious Investor on 11.29.12 at 10:53 pm

#17 Canadian Watchdog on 11.29.12 at 10:16 pm

Good show, CW. You’re absolutely right. Crises like the financial collapse of 2008-09 do not occur without fraud/corruption/theft. “We the people” must understand this.

#34 t on 11.29.12 at 10:55 pm

It’s concrete dammit, not cement

Remember ‘the concrete jungle’?
Well, they didn’t call it the cement jungle

#35 Ralph Cramdown on 11.29.12 at 10:55 pm

But I thought the mob was bidding low to get the business so it could launder money, and was doing a quality job because our trusty municipal building inspectors were making sure. Wasn’t it supposed to be win-win?

#36 Ken R on 11.29.12 at 11:03 pm

Buyer beware! I know dozens of contractors; many are very thorough, qualified professionals who do terrific work. They command a premium, and are worth every penny of it. Then there are some others that I would not hire to walk my dog; never mind frame my home. When I built my home 22 years ago, the framer I hired took me for a walk down the street and pointed to a house that was under construction. I want to assure you he said, “that your house will never look like that.” I hired him; paid him a bit more than the going rate at the time and have enjoyed living in the home since. Buyers need to do their homework or they will get screwed over.

#37 wes coast on 11.29.12 at 11:10 pm

I can’t even pretend to feel sorry for anyone that bought into this scam.

#38 Sebee on 11.29.12 at 11:11 pm

Karl, shoot the glass!

http://www.youtube.com/watch?v=HgBWDdVZrTs&feature=youtube_gdata_player

#39 DJIM on 11.29.12 at 11:11 pm

How is it we allowed every condo built on the waterfront to be made of the same ugly blue glass?

#40 ozy - in tone with Kanata on 11.29.12 at 11:15 pm

Tell me one thing at high quality in kanata (other than govt tax system and media brainwashing) and I will eat it. Even RIM (the last big standing titan) has a no-top-quality product compared with competition (ugly, complicated to use, in a word, useless to me).
You all want top quality but do not want to pay top price. Guess what, the really quality contractors/trades are too expensive because they work hard/more hours to deliver a good thing. The paper money most average people make in office jobs all over downtown, can’t compensate for such work.
Suggestion: do it yourself or shut up. I do not think there is other solution, you do not have the $ to import the japanesse/german to do the work

#41 Freedom First on 11.29.12 at 11:20 pm

Great post as per usual Garth!

Just had a thought. As a person who has read countless posts by you, your blog not only contains all the financial knowledge anyone needs to achieve financial bliss, but also, on a very regular basis, highlights the ignorance prevalent of the public in all countries. This rampant ignorance also not only sacrifices the imploding virgins, but jettisons many of the wrinklies onto the ice floes.

#42 John on 11.29.12 at 11:30 pm

On November 1st I made a comment about how I’ve been tracking condos listed on Kijiji for some time.
Well, today that very same query returns 6150 result from 6000 only a month ago. See for yourself. Clearly condos keep piling up. I will keep you posted.

#43 dutch4505 on 11.29.12 at 11:39 pm

if you really want some fun check out the condo prices and number of days for sale on condos that have special restrictions. check out the buildings where rentals are NOT allowed. even better check out the age restriction buildings of plus 55. leaky condo assessments are a christmas bonus. got to love the lower mainland of bc. PS property taxes are also going up.

#44 Canadian Watchdog on 11.29.12 at 11:44 pm

Pauline Marois' corruption task force on a role.

SNC-Lavalin's ex-CEO faces fraud charges

"The former head of Canada's largest engineering firm is charged with defrauding the Montreal University Health Centre while preparing the bidding process for the MUHC's $1.3-billion superhospital. Pierre Duhaime, 58, the former chief executive of SNC-Lavalin Group Inc., was arrested at his Dorval home Wednesday morning by members of Quebec's anti-corruption squad."

Now I wonder how many hospitals and government properties CMHC insures after reading this a few weeks ago.

#45 Canadian Watchdog on 11.29.12 at 11:45 pm

Reposted:

Pauline Marois' corruption task force on a role.

SNC-Lavalin's ex-CEO faces fraud charges

"The former head of Canada's largest engineering firm is charged with defrauding the Montreal University Health Centre while preparing the bidding process for the MUHC's $1.3-billion superhospital. Pierre Duhaime, 58, the former chief executive of SNC-Lavalin Group Inc., was arrested at his Dorval home Wednesday morning by members of Quebec's anti-corruption squad."

Now I wonder how many hospitals and government properties CMHC insures after reading this a few weeks ago.

#46 Soper Eats Babies on 11.29.12 at 11:55 pm

Back in June, we had our very own National Capital Region version of the exploding-glass-balcony meme.

http://cbc.sh/CBOCIAG

Fortunately for one bystander sprayed with microscopic shards, the Shoppers’ Drug Mart at ground level offered a free band-aid.

We’ve taken the safety of our sidewalks for granted in this country for too long.

#47 Mithan on 11.30.12 at 12:03 am

Canada has major problems. The issue is that this unravels slowly in real time. In five years we are going to look back and be saying “wow we’re we ever nieve”…..

If I had a nickel for every time a friend said today’s homes are better built or the boom is just starting or housing is bullet proof or always rises with inflation, I would be a richer man….

#48 Hugh Jasz on 11.30.12 at 12:08 am

#35 Ralph Cramdown on 11.29.12 at 10:55 pm
…..and was doing a quality job because our trusty municipal building inspectors were making sure. Wasn’t it supposed to be win-win?

You’ve tickled my funny bone with this.

In a previous life, I’ve dabbled in ICI construction. In my experience, many municipal building inspectors and plumbing inspectors would have a hard time finding their own arse because their head is somewhere such that they can’t see it.

#49 Phooey on 11.30.12 at 12:11 am

There is something serious missing in your analysis of the situation Garth. You mention “cheap money and lax lending standards” driving up prices. Sure that happens. But in the absence of restrictions on supply (shortage), your cheap money and lax lending allows reckless young people to buy better stuff than generations before them.
Take the example of cars. In past times young people would drive an old banger and later upgrade to a new Japanese car when older and richer. But now reckless young can borrow and go straight to a BMW.
But houses are different. In past times you say young people would buy “900-square-foot bungalows on suburban lots”. But now with cheap money and lax lending the young cannot buy them and must buy inferior housing like condos. What is different? There is now a shortage of decent houses on suburban lots, whereas there is no shortage of BMW’s. Why is there a shortage? Govt chokes supply in various ways and pokes demand with excessive immigration.

#50 Junius on 11.30.12 at 12:24 am

Great post and warning Garth. You are on a roll this week with warnings!

My father was a developer and general contractor. His #1 rule was never buy during a market boom. The construction standards are always poor as people don’t have time or care to inspect and the contractor is too busy to care. Add in the number of new and inexperienced construction workers and it is a recipe for disaster.

#51 Snowboid on 11.30.12 at 12:27 am

As renters, we are happy to have a ‘greater fool’ subsidize our housing costs – glad they have the money to help us out.

Condos in Kelowna have problems with sinking (doors won’t close, walls cracking), leaking underground garages, as well as building envelope failures. Plumbing issues and poor design are apparent everywhere you look.

Vancouver and Victoria have seen the brunt of the ‘leaky condo’ crisis, with some ‘remediated’ buildings needing repairs again.

We have friends that spent low six-figures in special assessments and had their buildings shrouded in green wrap for up to a year. Now many stratas are only able to get insurance with $ 100K deductibles (or more) and guess who pays the deductible when your sink leaks?

In our building (supposed high-end, granite, SS – etc) our landlord (who bought new in 2008) is in a tough spot. Bought as an investment for about $ 450K, could sell for about $ 380K today – not to mention their mortgage payments, strata fees, taxes and maintenance. At least they can write-off their losses, at least until CRA figures out there is no ‘expectation of profit’.

Their maintenance costs are high because of shoddy construction and cost-cutting.

No question renting is a ‘steal’ compared to ownership and certainly less risky.

Patient as ever…

#52 Smoking Man on 11.30.12 at 12:28 am

#8

wtf I could so speed read your post.
Machine nice try. 7 figs I’m yours. Not you j maybe.

I’m a ho

#53 OlderbutWiser on 11.30.12 at 12:30 am

Lost Soul – #32 wrote: “I just do not get the whole condo thing Years ago it was deemed an affordable alternative to a real home, you know back in the day when they cost 35 grand plus a pop.
Why would anyone even consider paying what in some cases is as much or more than many single family homes, not to mention the $6000.00 a year in fees and taxes plus(before mortgage payments) on a 700 square foot tomb?”
********************************************
You and others on this blog seem to have a hate on for condos. Let me tell you, I have owned and lived in a condo in downtown Toronto for the past 12 years. Before that I owned a SFH in Newmarket and did the commute down the DVP. Three and a half hour a day round trip commute….five days a week….in traffic that was getting worse by the year. The stress was unbelievable. Finally got smart and bought a 1250 sq. Ft. 2 bedroom condo at the base of Bay Street. Fabulous water views, no exploding balconies, concierge service, indoor and outdoor pools, fitness facilities, movie room, guest suites, hot tub, indoor parking and oh yeah…..a 15 minute walk to work each day….regardless of weather. Best move I have ever made. You seem to not be aware that the “condo fees” that you are so quick to dismiss cover all of these amenities. Furthermore, they also cover maintenance on the property, heat, hydro, water, sewer, garbage, phone, high speed internet, and cable television. Perhaps you need to add up what you pay for all of these services, add in the cost of your gym membership, pool membership etc and see what your real costs are to keep your SFH.

Come to think of it, you better also include your commute time at say, $25 an hour. See if your home in the burbs is really such a great bargain. Because I can walk to work, we only have one family car. We only drive it on the weekends. We save an enormous amount on car payments, insurance, gas, and maintenance. Better add in your commuting costs to your BPOE SFH in the burbs. Maybe you should add in the cost of the stress from the commute too….hmmmm, maybe your “getting” the whole condo thing now?……

#54 Cowpie on 11.30.12 at 12:31 am

Garth, I’m shocked by this post – shocked that it is news to anyone, that is.

I thought everyone in Cowtown knew The Calgary Contractors & Developers Pledge (repeat after me, with hand on heart):

“Build In Boom…Repair In Recession”

Shoddy work is just Calgary’s construction industry’s lay away plan for the lean times, thereby insuring a steady supply of work. Calgary’s construction industry + real estate agents + TNL@TB = stink. Just glad it’s all finally starting to get out there in the open, hitting the fan. Thank goodness for architect Tang Lee – Calgary is lucky to have him.

As for starter homes + first time buyers, anyone looking for a well built home in Cowtown should consider a yurt.

#55 Jounce on 11.30.12 at 12:35 am

Same thing with my mortgage. It also exploded after 15 years. Maintenance fees at up what ever equity there was.

#56 Cowpie on 11.30.12 at 12:50 am

#40 ozy – in tone with Kanata on 11.29.12 at 11:15 pm
Tell me one thing at high quality in kanata (other than govt tax system and media brainwashing) and I will eat it. Even RIM (the last big standing titan) has a no-top-quality product compared with competition (ugly, complicated to use, in a word, useless to me).
You all want top quality but do not want to pay top price. Guess what, the really quality contractors/trades are too expensive because they work hard/more hours to deliver a good thing. The paper money most average people make in office jobs all over downtown, can’t compensate for such work.
Suggestion: do it yourself or shut up. I do not think there is other solution, you do not have the $ to import the japanesse/german to do the work
—————————————————————-
Isn’t that just adorable? Thank you, Gen Y. Oh, to be young! (Don’t you all remember being 20something? thank goodness there was no internet or camera phones then…I’d hate to have to be answerable for all the stupid stuff I said and did…)

#57 Hurly on 11.30.12 at 1:10 am

Guess memories are short. No one remembers leaky condos in BC. Concrete is cured cement. Boo yah

#58 Crash Calaway on 11.30.12 at 1:18 am

Pic displayed above is O.J.’s first low speed chase.
Cops stayed well back fearing he might have a loaded diaper!

Back in 2008, curiosity led me to look at a few condo projects in Calgary. Never considered the hangman’s noose though.
Model show suites were “Trailers” and the framing on projects actually under construction were toothpick frames.

Heaven help buyers of these money pits.

#59 bridgepigeon on 11.30.12 at 1:21 am

You’re better off spending at the casino than on a stucco job. The roofing profession in Canada is a pseudo trade mostly, the wild west of contracting. All the fraudulent manufacturers on the residential side are experiencing class action lawsuits. This is the Canadian way.

#60 house burden on 11.30.12 at 1:23 am

Its finally making news now? I knew this was coming in January, from talking to my construction worker buddy.

Well this is great, it wasn’t long ago when Vancouver had the leaky condo crap. I guess history always repeats itself

But from what I hear, there may be a yearly inspection fee on all these builds. More money of the Financial Rapist which now has their hands in you pockets. What a bloody scam.

Expect the following, property taxes can go up 2%, translink is hungary for cash and is raising fair fees, and not taking care of the actual problem of people not paying their fares.

BTW as the houses get older there will be more maintenance required, meaning higher strata fees. And don’t forget those nasty one time fees, like a leaky roof, etc which hits all owners with a one time fee.

#61 Network Admin on 11.30.12 at 1:26 am

Also, on new construction the property taxes are not known sometimes for 2 or 3 years and for some people a 3 year tax bill of around $10000 maybe unexpected “surprise”
http://forums.redflagdeals.com/toronto-property-taxes-new-condo-856257/

#62 george on 11.30.12 at 1:28 am

“The European Central Bank’s court victory allowing it to withhold files showing how Greece used derivatives to hide its debt leaves one of the region’s most powerful institutions free from public scrutiny as it assumes even more regulatory power.

The European Union’s General Court in Luxembourg ruled yesterday that the central bank was right to keep secret documents that would reveal how much the ECB knew about the true state of Greece’s accounts before the country needed a 240 billion-euro ($311 billion) taxpayer-funded rescue.”

“In yesterday’s decision, the court upheld the ECB’s opinion that the documents sought by Bloomberg could damage the public interest and aggravate Europe’s financial crisis.”

ECB Withholding Secret Greek Swaps File Keeps Taxpayers in Dark

#63 GTA Girl on 11.30.12 at 1:40 am

The glass that has been installed in many developments in the last 4 years is not the glass that would meet code.

It is glass manufactured in China.

Basically a type of cheap substitute that will not last. Extreme heat/cold or even gusts of wind break them.

You should see what they put on the building envelopes.

Anything built in last 3-4 years is abysmal construction. Cheap or knockoff products. Cement diluted. Trade skills almost non-existent, due to lack of experience and cutting corners.

Forget about city’s building inspectors. Many are bought.

One subdivision development in the north GTA have even had a worker death that have been paid not to mention…here illegally and safety on the sight..pouring concrete..was horrendous.

There is enormous problems coming. Enormous

#64 Nostradamus Le Mad Vlad on 11.30.12 at 1:54 am

-
The pic resembles a different version of the O.J. Simpson long, drawn-out and s-l-o-w car chase in the early ’90s. Is he still wearing that glove?

“If they chose [sic] not to pay, they’ll face legal action, and be unable to sell their units until it’s resolved.” — So the lawyers, developers and banxters continue to suck money from the owners while bankrupting them in the process, the charade continues and more and more folks end up living on the streets or in shelters because of someone else’s greed. Great society we live in.
*
Green Energy Another way TPTB are taxiing the life out of us; Hogtown’s RE slump Going down; Low vol. ETF’s; Set Aside More for retirement; Where Canada’s richest invest; Lawsuits for BC condo owners; TD keeps rolling along; World economy Good or bad shape? This one says good; Cdn. RE Hard or soft landing? Working Retirement Not me. I’ve been out of the workforce too long; When CalPERS meets Greece; Finding the Money takes restructuring one’s life.

Chinese and Gold; Extreme Shoppers score big; The Real Fiscal Cliff is not what it appears to be; Spain Are PIIGS on the verge of completely failing? Is this the fiscal cliff? Student Debt goes Parabolic; A Pathetically Whining Fiscal Cliff; French Unemployment; 1:01 clip Ad of the Day; Seven Ways TFSA, buy low and sell darned high; Cheap US RE cities.
*
6:29 clip Ferrari vs. Bentley in Lapland (Silverstone on ice) and Holy Batmobile! Original up for auction soon; Goodbye Property Rights (PDF) “This is a very good article on the erosion of private property rights under Agenda 21.” wrh.com; Divorce Memories Happiest day of one’s life? France Becoming nationalized; Underground Facility Why is the US building one outside Tel Aviv? No Arabian countries pose a threat; Fully Grown Bengal Tiger Here kitty kitty; GMOs are killing us softly; Japan’s newest floating maglev train; China Upping the ante in the South China Sea; 7:07 clip Nat. Geog. on cheetahs running in slo-mo.

#65 Helga on 11.30.12 at 2:06 am

But all these big builders do give back to the community, they are all philanthropists.

#66 Fabrega on 11.30.12 at 2:17 am

# ozy – in tone with Kanata
What a pile of crock. Get a grip man.

#67 Renter but not poor on 11.30.12 at 2:17 am

I lived in Vancouver for plenty of years. Lots in a Yaletown condo. I never bought but sure enjoyed renting a condo. The price of the condos kept going up but the rent never did.

I took a look recently and to my surprise the rent 10 years later have not moved up much or even at all! Prices are going down.

I loved that 33rd floor rental for so little. I miss being single sometimes. If your home costs too much to be the owner … you are simply a loser.

I rent, have 3 kids and got my landlord by the balls to fix things while we enjoy life.

#68 Grim Reaper/Crypt Speculator on 11.30.12 at 2:18 am

I still have more faith in glaziers than DENTISTS

#69 ApplePi on 11.30.12 at 2:29 am

I’m a little surprised, Garth. Although I am sure people say they can’t handle a 30$ increase, but when it comes down to it people will either just pay it and eat out one less time or put it on their credit card. No need for excessive dramatics.

I really don’t think condo fees will be the death of us all. A collapsing economy on the other hand could destroy us.

#70 a prairie dawg on 11.30.12 at 2:42 am

“when the glass goes Bruce Willis”

– — –

Now that one is a keeper. lol

#71 West Coast Woman on 11.30.12 at 3:58 am

Condo purchasers in Vancouver should also be aware that water flow and groundwater problems can also result in substantial damage and costly assessments.

Vancouver used to have many streams throughout the City which, over the years, were covered over to create parking lots. In other areas (such as Little Mountain and Quilchena) low density apartments and housing were built on top of old swamps and bogs.

With the recent rush to densify everywhere, many of these parking lots and low density developments are being replaced by high density buildings with many levels of underground parking. This often has the effect of eventually causing water and structural damage to the new buildings as well as to the surrounding areas.

The City of Vancouver has been allowing these old stream beds to be dug up even if they know it will eventually cause this water/structural damage to occur, and refuses to take responsibility for any damages.

Since insurance companies will not cover any damage that is caused by streams/groundwater, the owners of these properties are on the hook for the cost of all repairs.

To see if your home is on or near an old stream, see:

http://koerner.library.ubc.ca/services/gis-services/secret-waterways/

#72 Tony on 11.30.12 at 4:00 am

Re: #12 DaleFromCalgary on 11.29.12 at 10:02 pm

Yet all the idiots in Calgary and all of Alberta for that matter will pay 50 percent more for a new condo which will fall apart rather than paying 50 percent less for a condo built 1978 or before and will last 5 times as long as the new condos. In Ontario the difference is around 10 percent. Why are all these Albertans so out to lunch?

#73 Jane24 on 11.30.12 at 4:12 am

I know I have said this before but my house in England is 105 years old and my house in Italy is estimated at 550 years old. They are made of brick and stone and are structurally very sound. The one if Italy has had an earthquake or six over half a millennium and hasn’t budged. Apparently a ceiling came down in 1980.

I know that Canadian homes built in the last 20 years are very shoddy indeed, especially for such a harsh climate as my family live in such houses.

What I don’t understand then is that with the finite life of these houses, the prices go up as the house ages and that such construction can be mortgaged for 25/30/40 years. I don’t think some of this construction will last as long as the loan against it.

Sooner or later this thought wil receive media coverage.

#74 Aussie Roy on 11.30.12 at 6:37 am

Aussie Update

Melbourne’s outer-suburban property market is facing a serious slump as distressed buyers and builders cancel one in every three new home purchases.

The collapse in sales could have serious repercussions for the state economy and the building industry, which employs more than 250,000 Victorians.

“We’ve never seen this before, so it’s a very strong signal that the fundamentals are wrong,” said Colin Keane, director of analyst group Research4, who compiled the new research.

He said the current cancellation rate of more than 30 per cent compared to an average two years ago of about 5 per cent.

http://www.theage.com.au/business/slump-looms-as-a-third-of-new-home-sales-abandoned-20121128-2ad95.html

STATE government developer Places Victoria is in turmoil over plans to cover a more than $18 million financial loss with a fire sale of public land to private developers – including overseas investors.

http://www.theage.com.au/business/property/public-land-sale-mooted-to-cover-18m-losses-20121125-2a1my.html

The pain in Spain falls mainly on the over indebted mortgage holders.

Spain’s banking association has said it will halt evictions of indebted home owners in extreme need for the next two years.

Monday’s decision to freeze mortgage-related evictions came after reports of a second suicide in 15 days by indebted homeowners facing expulsion in Spain surfaced.

http://www.aljazeera.com/news/europe/2012/11/20121112142235545174.html

#75 Rob aka Captian and Mrs Slow on 11.30.12 at 6:52 am

This is what an real estate investment should look like!!!!!!

Bet not many people run the numbers

http://www.mrmoneymustache.com/2012/11/23/real-estate-investment-madness/

#76 House on 11.30.12 at 8:12 am

Mortgage rates will rise in two to three years – is this a stanard perdiction? You mentioned it for three to four years now. In 2015 there will be another election and another reason to prove that the economy is just fine by more financial chicanery.

#77 Chasicakes on 11.30.12 at 8:23 am

The other thing I worry about Garth is the state of BC Credit Unions. A friend of mine who worked at Centarl One credit Unions told me that Vancity is way over exposed in mortgage risk. These credit inions are 100% guaranteed by the BC government which means that taxpayer in British Columbia is ultimately on the hook if they should fail.

#78 maxx on 11.30.12 at 8:30 am

Low building standards are certainly one source of future problems; so is managing condos on the cheap.

Some (many?) condo management companies don’t plan the sequence of important milestone work very well at all and have no clue, let alone long-term vision. A building we know very well has had water leaks through windows, roof and AC/heating units every time it rains- for years. It was decided that expandable foam would be injected between the cement and brick walls of this highrise, in order to insulate it. 3 years later, water still leaks through the cracks of the original ’70’s windows and this propagates through the cement and brick building envelope- only now, it also gets trapped in the pockets of air created by the expandable foam injections. This has exacerbated mold problems in the gypsum board inside the units and also the baseboards. This ticking lung cancer bomb worsens as time goes on. The windows are set to be replaced next year, and a window contractor said that the expandable foam insulation in the building envelope was a huge mistake and should never have been done, as the building needs to breathe in order to avoid mold growth, and certainly never before windows were replaced. DUH! I wonder what an air sample would show? Small wonder that sick-building syndrome exists. This building is a petrie dish too frightening to contemplate.

New builds are not the only ones with serious problems. I wonder how many lawsuits will crop up in future?

#79 Tkid on 11.30.12 at 8:37 am

#23, elevators were the bane of my existance when I lived at NXT. All four were frequently out of order but we couldn’t even use the stairs. Stairwell doors from the lobby were always locked and security wouldn’t open them.

#80 maxx on 11.30.12 at 8:39 am

#8 Country Girl on 11.29.12 at 10:01 pm

For Smoking Mans and his fans:
Aoccdrnig to rscheearch at Cmabrigde uinervtisy, it deosn’t mttaer waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteres are at the rghit pclae. The rset can be a tatol mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae we do not raed ervey lteter by it slef but the wrod as a wlohe.

Agreed, but “iprmoetnt” should be “iprmoatnt” and “it slef” is really only one word.;-)

#81 Kevin on 11.30.12 at 8:39 am

Meanwhile as sales slow, banks exit financing and prices ratchet back, developers find their margins thinning. Wouldn’t you want to cut a few corners?

If only there were some set of rules – a “Builder’s Code” of some sort – that dictated acceptable materials and techniques in constructing housing.

Don’t blame the builders for using the cheapest materials permitted. That’s simple capitalism. Any fault with these “exploding balconies” or other poor-quality building materials should be laid entirely at the feet of a) the politicians and civil servants responsible for drafting overly-lax building codes, and b) sloppy inspectors who miss or overlook obvious shortcomings and violations.

#82 maxx on 11.30.12 at 8:59 am

#38 Sebee on 11.29.12 at 11:11 pm

Karl, shoot the glass…………Excellent segue!! LOL.

#83 sheik yahboudi on 11.30.12 at 9:10 am

Hey! Is anyone else watching the dual meltdown of Recreational properties in BC?

I owned a condo on a ski hill for about 10 years when we could still get vacation renters to pay our mortgage.

Rents got thin as overbuilding continued and the rental pool became saturated. We sold a couple of years before the Olympics and I am so glad.

Anyway, the prices are coming apart and the listings are huge. Some 3 – 4 bedroom homes are going for the same as new condos listing prices!?! Gotta think ski condos are going to hit the skids very soon.

#84 JB on 11.30.12 at 9:13 am

First of all, I would like to state that I like living in a “rabbit warren”. Living in an apartment bears many advantages. You don´t have to cut the lawn, pay house insurance, etc. I never wanted to be slave of any property, in terms of mortgage or my free time) so I think that condos can be a great solution for a person like me.

And now the reality: The population of over-65ers has increased to almost five million over the last five years, as Canadian census from 2011 shows. And I bet this number will only increase. This will put a hard pressure on the housing market and will lead to a complete disaster in the RE market. And it is highly probable, that the market with condos will be the very first victim.

#85 T.O. Bubble Boy on 11.30.12 at 9:18 am

@ #42 John on 11.29.12 at 11:30 pm
On November 1st I made a comment about how I’ve been tracking condos listed on Kijiji for some time.
Well, today that very same query returns 6150 result from 6000 only a month ago. See for yourself. Clearly condos keep piling up. I will keep you posted.
—————

Well – it’s up to 6166 condos now.

For some extra fun, type in the keyword “assignment”, and there are 333 of those.

The CRA should probably be doing the same thing, since those are 333 tax evaders.

#86 Young & Foolish on 11.30.12 at 9:20 am

Great post again ……

Today’s developers do not plan on being REITs and therefore care less about the quality of construction. The buildings are turned over to owners (as well as the maintenance), just like banks today do not have to worry so much about the ability of the mortgages since they are guaranteed by taxpayers. It’s all about liability ….. remove that, and it seems everybody is out for themselves.

#87 detalumis on 11.30.12 at 9:32 am

#10, you actually sound like an 80+ year old, those are the old-old people in some condos who think a 10 year old lobby is “good enough” and don’t want to pay for any updating even though a dated lobby is the #1 reason people won’t go upstairs to look at your unit when you want to sell it.

#52 is correct, I live in one of those stupid “solid” bungalows and right, the workmanship is so great that there is no insulation in the walls, the only way you can add any is by tearing out the plaster and redrywalling. Give me a break, I spend $4,000 minimum just on maintenance alone and I don’t even get snow clearing or grass cutting and that yet. House maintenance is every bit as expensive if not more.

If there is a problem with shoddy construction then it is there in the new home market as well and you need to have tougher building codes not diss an entire sector.

#88 Canadian Watchdog on 11.30.12 at 10:20 am

G&M:Ontario pushing Ottawa to sell government stake in GM

“Ontario Finance Minister Dwight Duncan says it’s time for the government to get out of the auto business, calling on Ottawa to unload shares of General Motors even as the stock trades at less than half the price taxpayers would need to get their bailout money back.”

Because when it’s not your money, who gives a rat’s ass.

#89 Rudolf on 11.30.12 at 10:22 am

Thirty years ago a well known Toronto builder of his own rental apartments turned condo developer. While the rental buildings were well built to avoid premature maintenance problems or repair requirements, little or no emphasis was given to quality of materials and workmanship during the construction of condominium projects.

I bought a condo unit in one of their then “award winning” buildings. It turned out that more attention had been given to curb appeal than construction details. The first problem was that the entire underground garage flooded whenever there was a heavy rainfall. The second problem was that after only three years major brick repairs became necessary to stop severe deterioration in progress.

A million dollar lawsuit dragged on for years. When the case was finally settled in favour of the condominium corporation, the builder had gone bankrupt and never paid a cent. I sold and moved.

#90 Donn on 11.30.12 at 10:41 am

#4 “The builders, banks and condo realtors should be ashamed of themselves for preying on their naïveté.”

Dream on. The buyers must educate themselves, maybe talk to a condo owner, lawyer or google “condo repairs Canada” (4.6 MILLION hits). For once, take care of yourselves no one else wil. Don’t cry to the government for a bailout when it blows up. The other taxpayers don’t want to pay for your naïveté.

#91 Whyrent? on 11.30.12 at 10:52 am

Renting might be the right thing to do while home prices start to come down to more affordable price points, but at the moment, at least for Toronto, I find landlords are charging way too much for rent. For example, I’ve found bungalows for rent where only the main floor is being rented out with 2 bedrooms and rates are around $2,200-2,500 a month! Utilities not included of course. And this is not for a “yorkville” or “the beaches” area!! There is a lot of greed around … both landlords and real estate agents need a reality check.

#92 Condos4Life on 11.30.12 at 10:57 am

Hi Garth,
My First post. I’ve been living my whole life in Toronto Condos\Apartment Buildings as a renter and an owner. Currently I am renting but want to get back to being an owner in the next year or two. I understand what you are saying about the newer buildings coming onto the market or have in the past 5 years. What are your thoughts about a building that is about 10-12 years old? I don’t want to move into a building that went “live” after 2005. Should I be worried about the same shoddy workmanship?

#93 Goldfinger on 11.30.12 at 11:14 am

http://toronto.ctvnews.ca/ford-calls-vaughan-a-liar-in-dispute-over-downtown-condos-1.1060371

Here’s our awesome city council in action. Check out this video of Rob and Doug Ford ….. reminds me of some tag team wrestling duos back in the WWF days !! Demolition, The British Bulldogs, etc. !! Where’s Mean Gene Okerlund when you need him!!

#94 willworkforpickles on 11.30.12 at 11:20 am

Third world-ification in process is well under way in North America.

#95 TimL on 11.30.12 at 11:29 am

I was speaking to a contractor who does electrical work in a town just outside Toronto. We got talking about the electrical wiring jobs done in the new subdivisions going up.
He never bids on the subdivision jobs because he knows the quality of his work, and the rates he’d have to charge, would put him out of the running. But one day just to see what woud happen he entered a ridiculously low (by his standards) bid. He still got underbid. He figures he’ll have a comfy future doing repair work on all those hundreds of shoddily built houses going up.
Those new houses don’t sound any better built than these condos.

#96 Daisy Mae on 11.30.12 at 11:46 am

#56Hurly: “Guess memories are short. No one remembers leaky condos in BC. Concrete is cured cement. Boo yah”

*****************

I remember — Cloverdale condos. I’m aware of one woman who took out a Reverse Mortgage to pay for her repairs…

#97 Dorothy on 11.30.12 at 11:53 am

It never ceases to amaze me how few people get really angry at the politicians who allow such shoddy workmanship in so many of our newly constructed buildings.
Why are the current building codes so lax? And why are the so obviously inadequate building codes we do have so poorly enforced?
Regularly we see articles in the media about poor building construction. One has only to watch shows like “Holmes on Homes” to see how this trend has extended to single family homes as well as condos. So again I ask, WHY is this state of affairs being allowed to continue, and WHY aren’t people DEMANDING their politicians do something about it?
For the average person, the investment they have in their homes is the single largest financial investment of their lifetime. Certainly there is an element of “buyer beware” that needs to be considered, however surely there also needs to be some protection from crooks and fraudsters too. The average person simply doesn’t have the knowledge to detect the kind of shoddy workmanship that often leads to huge bills down the road. And that’s why our local municipal governments need to be more involved in making sure that building codes are adequate, and that contractors adhere to them.
People need to hold their municipal politicians to account on this issue, because far too many are not taking this aspect of their job seriously enough. Either that or their getting kickbacks to look the other way! You decide which.

#98 Daisy Mae on 11.30.12 at 11:54 am

#63Nostradamus Le Mad Vlad: “The pic resembles a different version of the O.J. Simpson long, drawn-out and s-l-o-w car chase in the early ’90s. Is he still wearing that glove?”

*********************

He can’t ’cause remember “it doesn’t fit….”?

#99 Dupcheck on 11.30.12 at 12:05 pm

Typical of new condos, the developer purposely will assume low maintenance fees until all the units are sold, and then 2-3 years after the monthly maintenance fees go up by 30%, because of the cheap quality that they used to build these buildings. And the fees only go up from there because the fixes are endless. Condo’s are a money pit. Save your money move to a smaller city and buy a detached house for the same price. Or rent if you do not want to move, its cheaper than owning a condo.

#100 Dr. WAYNE on 11.30.12 at 12:07 pm

Condo prices in the Lower Mainland coming down … yes they are. Two years ago we sold our investment two-bedroom condo in Delta (near Tsawwassen) for 320K … the same condo is now listed at 265K.

#101 Andrew on 11.30.12 at 12:20 pm

True Story:

I work in a public library. A young fellow asked me if I could help him find the provincial building codes. We got to talking as I looked them up and he explained why he was looking for them:

“I work for a contractor and he builds nothing to code, so I thought I would bring in them in to show him what they are.”

True Story.

#102 Aussie Roy on 11.30.12 at 12:26 pm

Aussie Update

OFF-the-plan unit buyers have had their deposits refunded as a major Queensland property developer puts two major projects in Hamilton and Townsville on ice.
Mirvac has postponed development of its $300 million Foreshore Hamilton project at Hamilton in Brisbane.

http://www.news.com.au/realestate/investing/units-put-on-ice-as-sales-stall-in-queensland/story-fndbarft-1226525465795

Speckers still positive even while prices around them crash. – It’s different here – lol

MORE than three-quarters of landlords are feeling positive about their property investments despite falling prices.
A new report by research group BDRC Jones Donald says 77 per cent are positive about their real estate investment and one in five plan to buy another property within 12-18 months.

Good luck

http://www.news.com.au/realestate/renting/lords-of-property-confidence/story-fndbatbk-1226524046303

Too big to fail

The International Monetary Fund (IMF) has highlighted concerns about the concentration and interconnectedness of Australia’s big four banks in the most recent Financial System Stability Assessment on Australia. It reports Australia’s four major banks, The ANZ, Commonwealth, Westpac and NAB hold 80 per cent of the countries banking assets and 88 per cent of residential mortgages. Such dominance in the market, each with similar business models and reliance on overseas funding leaves the majority of Australia’s banking sector exposed to common shocks.

http://www.whocrashedtheeconomy.com/blog/2012/11/too-big-to-fail/

#103 Andrew on 11.30.12 at 12:31 pm

I look out the window of my rental townhouse each morning and I have a great view of the 6 yr old pink particleboard and stucco condo building across the street, currently covered in scaffolding. Word is they are doing a complete roof replacement a job that will cost hundreds of thousands to complete.

We used to have a nice view of the river valley, now we get to see the ugly thing made worse by being covered in scaffolding the last several months with no end in sight.

#104 Suede on 11.30.12 at 12:47 pm

OPM is the best drug for people involved in business and finance.

Other Peoples Money.

#105 Tony on 11.30.12 at 12:52 pm

Re: #74 Rob aka Captian and Mrs Slow on 11.30.12 at 6:52 am

When you read some moron spouting some crap on a blog you can be certain the U.S. housing market is still quite a ways away from the bottom.

#106 Derek R on 11.30.12 at 12:53 pm

#79 maxx on 11.30.12 at 8:39 am wrote:
Agreed, but “iprmoetnt” should be “iprmoatnt” and “it slef” is really only one word.;-)

Excellent, maxx! I’m impressed. I think that you deserve the GreaterFool “Pedant of the Year” award for that one!

#107 Derek R on 11.30.12 at 1:02 pm

#72 Jane24 on 11.30.12 at 4:12 am wrote:
What I don’t understand then is that with the finite life of these houses, the prices go up as the house ages

Jane, the explanation is that the price of the house doesn’t go up. The price of the house goes down as the house ages. What goes up is the price of the land that the house stands on. In the worst case the house is A worthless but the land it stands on could still sell for $1,000,000. Hence the price of crack shacks in downtown Vancouver.

#108 robert james on 11.30.12 at 1:06 pm

Realtors are having a tough time in Vancouver.. LOL http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/11/sign-of-times-young-maple-ridge-realtor.html

#109 live within your means on 11.30.12 at 1:07 pm

#72 Jane24 on 11.30.12 at 4:12 am
I know I have said this before but my house in England is 105 years old and my house in Italy is estimated at 550 years old. They are made of brick and stone and are structurally very sound. The one if Italy has had an earthquake or six over half a millennium and hasn’t budged. Apparently a ceiling came down in 1980.
……………………………….

PIL’s in France had their home built 50 yrs ago & FIL (in spare time) put in his own kitchen, well designed at the time, He even made the ‘traditional’ wrought iron Romeo balcony off the dining room, etc. However, to renovate these types of houses inside is very expensive as the walls are made out of cement or concrete blocks. PIL’s are 80 & 82 & but many of the younger French generation want more open design homes. They’re still building the envelope in brick, but they’re increasingly using wood for the interior walls & I think the wood they use, even from Canada, is of a higher quality that what we are offered in Canada.

A few years ago we visited an old friend of my DH who lives in a 2-300+ yr old home. I think it was Dinan in Britanny. Small but fabulous. We visit France every 2 yrs at least, have visited such beautiful old towns & cities that I get confused which is which. But, I love each one.

#110 Franke le Skank on 11.30.12 at 1:15 pm

#68 ApplePi on 11.30.12 at 2:29 am
Condo’s fees alone will not be the death of us all, but you can add it to the pile. What am I talking about?

Bell services going up in price
Hydro going up
TTC fares going up
rents go up
condo fees go up
taxes going up
food going up
Interest rates going up

Compound these increases with all the wage freezes due to shit economy. In my opinion, when you consider the amount of people who have borrowed beyond their affordability, all of the above expenses when accumulative can cause unforeseen hardship on their cash flow.

Most people did not account for inflation when doing their budget. How many people asked if they could afford their mortgage if interest rates went to 5%???

#111 machino on 11.30.12 at 1:35 pm

Well living in Vancouver as a renter in the same building for 7 years. Have seen since moving in telling signs the building had moisture issues. Finally are going through rain-screening right now. It is costing each owner $120,000. So glad I am a lowly renter, and not the couple who moved in 2 years ago who were in a bidding war and decided to waive inspection.

#112 antiflakflak on 11.30.12 at 1:43 pm

Hmmm, yeah its been in the media so many times already this year, especially that these skyscrappers have been letting loose with their glass, so what gives, why are the building codes not being implemented , where are the inspectors? also I guess that makes it hazardous to walk around downtown Toronto through skyscrapper alleys. Not to mention wind storms that blow through, that knock out more glass. Lastly these skyscrappers really are a blight visually speaking.

#113 Mister Obvious on 11.30.12 at 1:44 pm

#106 Derek R

Right you are Derek. I sold my “land” for a stupidly high price in 2010. The 57-year-old bungalow that sat upon that land was simply a minor nuisance to the developer who replaced it with a huge and rather ugly Vancouver special which is currently for sale at an insanely higher price. That’s just how things are done around here.

#114 Maxamillion on 11.30.12 at 1:46 pm

#86 detalumis
You sound like someone who sleeps in lobbies and reasons like one.

#115 Bo Boka on 11.30.12 at 2:01 pm

#72 Jane24
Maybe that is the reason Canadians change homes so often.
If I would sell a product with that crappy quality I would be out of business. The whole thing is a scam. And the insurers know it.

#116 Mister Obvious on 11.30.12 at 2:07 pm

Vancouverites labor under the delusion that we live in Southern California and not southern British Columbia. For this reason, we tend to build structures that would be appropriate in the Mojave Desert but certainly not in a rain forest such as the West Coast of Canada.

For the last 20 years, the landscape in the lower mainland has been covered with envelope reconstruction projects galore. Some are being done for the second time. We simply can’t get over our infatuation with Adobe stucco.

It’s absolutely appalling to see the soggy rot underneath these porous exteriors. Toronto has nothing on us when it comes to building inappropriate structures. We have hundreds upon hundreds of them in varying stages of repair.

On the bright side though, it does keep a lot of construction trades busy.

#117 Old Man on 11.30.12 at 2:13 pm

Here is something to think about. My daddy hired a cement contractor about 1950 to pour off the backdoor a patio entrance about 15′ x 10′ as an entrance way off the main driveway. This slab of cement concrete was hit by snow, hail, rain, and ice for decades. I to this day could understand why there was never a crack; or any imperfection; not even a chipping anywhere.

#118 antiflakflak on 11.30.12 at 2:14 pm

Cities/towns/districts(canadian) that have joined up with ICLEI affiliated with UN Agenda 21 are as follows:
Calgary, Edmonton, Sudbury, Guelph, Hamilton, Kitchener, Mississauga, Regina, Toronto, Durham Region, Essex, Ft. St. John, Halton Hills, Iqualuit, Leduc, Metro Vancouver, Red Deer, Region of York, Blue Mtns, Corp. of Delta, Thunder Bay, Oakville, Ville de Montreal

#119 Regan on 11.30.12 at 2:18 pm

Home owners rarely track, or even notice, their maintenance costs, especially if you included personal time. My microwave died suddenly, sewer backed up and I got my regular furnace and A/C maintenance done. $1000, and that was just last week. And none of them are truly structural issues, just things that happen. New house, old house, new condo, old condo… it doesn’t matter, you need to inspect them and know something about managing them before you buy. For someone like me who can repair a lot of things and clean my own eaves etc. it doesn’t make sense to live in a condo and hire pros to do every little thing. It’ll be a different story when I’m 65 though.
Anyone who is shocked at $6000 a year in maintenance costs is simply not realistic about the costs of good maintenance. Now, if it’s crappy maintenance for the dollar, they have every right to complain. But if you’re been lured in by those fancy ‘amenities’ that you never really use and now balk at paying the price tag for them, well, you did this to yourself.

#120 EB on 11.30.12 at 2:33 pm

Same old same old. As with the leaky condo disaster in BC, the criminals who built the shoddy places will go free with their winnings, and the suckers will pay for decades to clean up after them.

All anyone can do is try not to be one of the suckers.

#121 Sathington Willoughby on 11.30.12 at 2:36 pm

#25 LJ
Not all the older homes are torn down in Calgary. If the developer is smart and the house is decent, he’ll practically give it away to a building mover who will find a buyer for the house and save on the demolition and waste costs.

I have personally purchased three such homes, built pre-1970’s and had them moved out to the country, placed on new concrete (good thing I didn’t say cement) foundations and voila! A damn good solid house with 2×4 exterior walls that I’d take any day over the newer ones built with 2×6 walls.

Smoke ‘em, smoke ‘em, smoke ‘em if ya got ‘em

#122 Old Man on 11.30.12 at 2:57 pm

I must admit never knew things could be this bad, so for those that want to buy a home or condo when the time is right several years from now it might be time to think about it all with a renewed perception of reality.
Why not look at established areas for a much older home or condo going back in time; be it renovated or not; with a sense of elegance and charm.

Today the drywall or wallboard is all junk, but years ago it was called cement board. Ok, so there is always another way to buy, so perhaps focus on an older well established neighbourhood near a transportation network like the bus or subway. It appears to me that many in TO have purchased a future nightmare as it all seemed so cool to be part of the crowd, so why not think about a much older residence instead?

#123 Beach Girl on 11.30.12 at 3:00 pm

Well, you would have to be border line retarded to buy a condo. Elevators, seriously. Of course the condo fees will go up. I would F you over too, given the chance. And these retards are going to get reemed. Like in taking it large. A crippler.

Unfortunately, spent some time in Liberty Village. What a hell hole.

We are not meant to live in the sky. Collapsing windows and balconies. That is no way to live. You need terra firma.

Put the Xmas tree up, drove my friends to the food bank, living large.

#124 Silver on 11.30.12 at 3:15 pm

I love to play “pick the soon to be leaky condo”. started back in 1998…. funny how Very few I’ve missed. You should see my soon to be list…
I really love the term California Stucco… thought that should go over well…
High rises all over here covered in that shit… mold and drip lines on most buildings less 2 years old… tells you where it will leak…

They slapped together the new stuff.
It is overpriced crap. With major profit points on the first sale…
… and repair assessments forever after paying @$500 a square foot…
How many people out there have even the faintest idea of what it costs to replace a 10 ten story high rise buildings water piping…
Most people know more about how their cell phone works than they do about the biggest investment they make… “Idiot Investors” deserve what they get.

16 days and counting… and I’m out and safe from Vancouver. Much richer…. too…

The City Council here really is a useful bunch of Village Idiots… for the real estate industry…

Silver

#125 Buy? Curious? on 11.30.12 at 3:30 pm

Garth, here’s a new article in Time discussing Canaduh’s financial situation. I know you’ve pointed this out several times, but like true Canadians, until someone in the States mentions it, we ignore it.

http://business.time.com/2012/11/30/oh-no-canada-as-household-debt-skyrockets-will-canadians-face-a-2007-style-crisis/

Check out the Smoking Man Tribute Pt2 on YouTube.

#126 BigMistake on 11.30.12 at 3:37 pm

Just bought 3865 Lakeshore Blvd W known as Aquaview condo located on the south side of Lakeshore Blvd W and 42nd Street in Etobicoke. Shity view right now between old apartments, crappy quads and old 1940s homes.
I can’t believe I just coughed up 350K for this. I know I am going to pay big time down the road for this. Losses are coming, crap, crap, crap. Already have a quality issue with builder. Would have done better in Port Credit!

#127 Old Man on 11.30.12 at 3:38 pm

This in my humble opinion is a very important posting, as Garth has disclosed a hidden nightmare which I personally never gave much thought about, as this in itself, is another nail in the coffin called a contingent liability.

“Well, Real Estate is always good, as far as I’m concerned.”

– Donald Trump

Well we all know about his project in Toronto, as the investors are freaking out about being hooped a bit.

Now, Garth has given us all some brilliant wisdom with this posting. I want you to focus on the word ‘Real’, as there is a difference between Real and Illusion, and Garth has taken away the veil for us all to ponder the illusion of it all with construction problems that could cost big money.

#128 Buy? Curious? on 11.30.12 at 3:39 pm

Garth, I know journalists try to provide some balance to their news pieces but how come you’re never asked to comment? Are you blacklisted or something?

This is journalism. That is noise. — Garth

#129 Old Man on 11.30.12 at 4:02 pm

#122 Beach Girl – I sure would appreciate a ride as well to the food bank, and look on the bright side, as will chip in a loonie for you gas money, but will you help me taking my groceries up to my flat, and stay for a cup of coffee?

#130 nice job Buy Curious!! on 11.30.12 at 4:09 pm

hehe really enjoyed your video

http://www.youtube.com/watch?v=W8rHcXsI6E0

#131 bill on 11.30.12 at 4:39 pm

#91 Condos4Life on 11.30.12 at 10:57 am
here in kitsilaino [ vancouver]it would appear that every condo built around here has had an envelope or roof problem.
one at broadway and yew is undergoing extensive repairs as I type.
perhaps condo owners in the area could speak up to show that their buildings have never had this happen.
it would be interesting to see if there are any that havent had problems .
small list I expect.

#132 Fartweezel on 11.30.12 at 4:40 pm

Another great read! Thank You Garth!

And Thank You Nostradamus for the comments and interesting links! Good to see you back!

#133 Steven Rowlandson on 11.30.12 at 4:53 pm

People have to find out the hard way.

#134 Beach Girl on 11.30.12 at 5:32 pm

#129 Old Man on 11.30.12 at 4:02 pm

#122 Beach Girl – I sure would appreciate a ride as well to the food bank, and look on the bright side, as will chip in a loonie for you gas money, but will you help me taking my groceries up to my flat, and stay for a cup of coffee?

___

I am in.

We want the extra jar of peanut butter, that poor people live on. LOL.

#135 Coho on 11.30.12 at 5:41 pm

Those who can least afford overpriced exploding condos are the main target demographic. They’re the unwitting pigeons not having lived long enough to develop some sense. Exploding glass and 5K to 10K special assessments is something they or others who can well afford the glorified stalls in the sky is something they should never have to deal with.

Their naivety is understandable because of youth. How many of us growing up assumed those in power were the best society had to offer to responsibly carry out the affairs of our nation? Yes, crap happened, but it was because of mistakes and not lack of trying or good intentions. Ha!

But, it’s the property virgin parents that should know better having more years under their belt, if of course they’ve paid even the slightest attention to world affairs. Unfortunately, though, it is the blind leading the blind. It is the parents which ‘help’ their kids into a half million in debt. Buy today or buy never. Yet, tomorrow will come and somehow there will still be buyers.

How long do people need to tread on this planet to begin to realize that many things are not what they appear to be. Perhaps many more do realize that everything isn’t on the up and up to do with monarchies and the role they have in world affairs (made to APPEAR very small), to the banking elite, to multi-national corporations, and yes even down to the politicians. Of course, many realize something smells yet don’t dare utter it aloud lest they be labelled as conspiracy theorists and ridiculed.

#136 Beach Girl on 11.30.12 at 5:53 pm

The Ford shit was a fiasco. I actually know Clay. Now we have an ungoverned province. Yes, he is a baboon. But the measures to take him down were unwarranted. Who is leading this province? Am very annoyed that my tax dollars went to torture Ashley Smith. Come on. That was totally out of line.

#137 Just Park It on 11.30.12 at 6:02 pm

Many moon’s ago – I worked 1 year with a manufacturer who build windows for new home construction. We were poorly paid – and those employed could care less what they built – the turnover was extreme, new guys were hired monday and fired by Wednesday.

Well, I worked as a glazier (installing glass into window frames and then sealing it with the bead). I had a few helpers and one in particular had such a hate-on for the owner that he purposely covered the train holes inside the windows with caulking, which would eventually cause serious issues with condensation, mold, and material failure – hundreds upon hundreds of windows must of left the factory for new homes with the issue.

I kept telling him he was only screwing the new home owner – but he could care less. The moral of the story – he was probably like hundreds of others througout the entire industry who build cr@p and was happy to do it.

You get what you paid for – simply paying a guy $25hr would have provided a higher quality product with workers who cared about keeping their jobs.

It may be people will be asking when the home was built as the reason to buy or not (2003-2013) should stay clear –

It’s gonna get ugly…

#138 Mike on 11.30.12 at 6:06 pm

Thanks for this reminder Mr Turner.

Also, journalism is what you provide your readers.

The MSM does reporting. Report what the actors (politicians/business executives etc) say with no thought or analysis. I think Eric Reguky hates me as I email him almost daily lol.

Folks, think of cariage houses as an alternative to condo/apartment living. I have my own little 700 sq ft house, own walls, own driveway, front door to the outdoors….$900 all in.

#139 Hoof Hearted on 11.30.12 at 6:32 pm

About 20 years ago saw this excellent documentary about this NYC skycraper being built….literally from A to Z. Inlcuded design, building, getting tenants….

One thing that stood out was they built a mock up of the exterior wall and subject it to various lab created weather conditions. If a leak was detected, back to the drawing board.

Saw the same thing re: one of those Middle East Countries (Dubai?) where they did a mock up of a wall for one of the worlds tallest buildings and gave it the torture test.

Why that doesn’t happen here is beyond me…its not rocket science.

As someone once said ” Think like Water.” ….aka can water penetrate the given design ? One of the worst products is caulking….does not last, false sense of security.

Finally..we were at Whistler this summer and stayed in a wood frame hotel, approx (4) storeys high. It was raining and I looked down below and noticed the rain shadow..ie where the ground was DRY. ie approx 4 ft from the hotel wall . It pretty much matched the large overhang ie 4 ft out from the building.

I recall the formula is one foot of overhang per each floor.

No overhang? may as well run a hose down the wall.

#140 Construction Consulting on 11.30.12 at 6:59 pm

I am very well familiar with construction and engineering (for construction) industry in Canada. Many things I see every day I can not explain other than greed and corruption on the background or gross neglgence on all levels – corporate, municipal, personal. I am glad that the investigation in QC reveals problems in the industry. I think, however, that what they found is the tip of the tip of the iceberg…

#141 hangfire on 11.30.12 at 7:07 pm

The fact is that developers have been pouring sand rich concrete for years because of escalating aggregate/transportation costs….everyone in the industry knows this……city inspectors…usually hired for their colour of skin and immigration status are not trained to test concrete. I would and could go on about corruption and incompetance in the city hall employess efficacy but the liberals on the blog would set their hair on fire and start calling me names for having exposed this neat little scam.

The banks have a nice little trick waiting for the condo owners who are recieving special assessments for failing structures……it was pioneered in Vancouver in the thirty year long leaky condo scandal…( led by the incompetance of inspectors and the glaring idiocy of architects/engineers in Canada) …the banks wrap the assesment into the existing mortgage….failed bldgs are a new ‘profit center’ for financial institutions….captive audience or what…a marketers dream are the condo fools.

#142 Old Man on 11.30.12 at 7:08 pm

There is only one way to get quality trade work done in 2012, and that is to ferret out some old man who was a master from the old world that needs respect; some part-time cash; and above all wants to get away from his wife who drives him nuts in retirement. I did this once with a roof leak, so needed a painter and one who could plaster the ceiling back to life.

They were both masters at the trade. Now the painter could work a roll like conducting a symphony orchestra with utter speed and perfection. The master plaster came first and laughed, as said this is a piece of cake, as you have about 10 layers of old paint which is the source of the scars.

This guy brought out a set of stilts, and did a dance all over the livingroom ceiling with his stuff to make all in a sense of total perfection within 30 minutes for the painter to come in; both old masters who wanted not much money at all – just needed something to do.

#143 Risk Analyst on 11.30.12 at 7:12 pm

At bigmistake, I saw those aquaview condos when I was looking for a place. I can’t believe the garbage that builder put out. You and the other owners should seriously consider sueing him. I felt like I was in a ghetto in Detroit being inside of there. Have you seen the new condos at Kipling station. It’s honestly like night and day comparing those units to aquaview.

#144 hangfire on 11.30.12 at 7:24 pm

Defined benefit pensions ( and only civil sernavts have them) are saving the completely stupid….even when they actively try to be as stupid with their finances as a couple can possibly be…..Don’t you feel better about being a Canadian taxpayer when you read stories like this?

http://business.financialpost.com/2012/11/30/family-with-six-figure-income-broke-every-month/

#145 habbit on 11.30.12 at 7:33 pm

Employers want the best price. That includes labour. So if they can get a poor job done to pass inspection they will likely take it. Competition ya know. Warranty periods on labour are usually one year, at least for the finishing trades. Trades people typically install SPECIFIED materials including builders grade. If you want quality then know the builder. You pay more but get what you expected. Trades are no different than any other occupation including financial advisers. Many want to do the best job they can but with the specs, timelines,many do the best they can and fall short. If it looks good today it must be good eh! This is problematic in general. Too much emphasis on making $ now. Dumb asses everywhere.

#146 Hoof Hearted on 11.30.12 at 7:39 pm

#137 Just Park It on 11.30.12 at 6:02 pm

Double Glazing is simply a scam.

You may double the “R” value as opposed to single glazing….From R1 to R2 …but is still high heat loss…especially those floor to ceiling windows. Then the double glazing fails ..have to replace…it they shitty building hasn’t fallen down yet.

Less window -/more wall is energy efficiency

#147 habbit on 11.30.12 at 8:01 pm

A good quality job regardless of occupation is almost always faster then good enough. In the enviroment we have participated in building this REALITY gets lost. Dumb asses everywhere.

#148 tf on 11.30.12 at 8:12 pm

So many stories –

Here’s mine. In Vancouver, I live in a townhouse complex of 128 units, built in 1982, during the “condo boom.” 1982, build, build, build – lots of buyers.
Award-winning modern design that includes flat roofs (remember Vancouver is in a rain forest), decks over living spaces, airtight windows – no air circulation or opportunity for water ingress to flow out. No quality control, poor standards, untested products.

After only 15 years, in 1997, the stucco started falling off, wood balconies started rotting, and black mold appeared underneath bedroom windows. Thus began the long saga leading to the current building envelope retrofit (BER).

We’ve been under scaffolding and tarps since Feb ’12 and have another 18 months to go. Price tag? $16 million. Special levy? $125,000 per unit. If we don’t pay the levy when it’s called, a lien goes on the unit so you can’t sell. If you can’t pay the levy, the Strata Corp can seize the unit and we’re left with nothing. Sounds pretty doesn’t it?

I must say that the BER is happening with wonderful quality control – each step is surveyed, reported and corrected if not up to standard. I have no doubt that if this care was taken when the place was built, we wouldn’t be here now. But we are. We’ll have a great place when finished but the cost is off the charts.

Thanks for your practical and realistic writings Garth. You continue to be one of the few sane and objective voices when it comes to real estate.

#149 Country Girl on 11.30.12 at 8:22 pm

#79 maxx on 11.30.12 at 8:39 am wrote:
Agreed, but “iprmoetnt” should be “iprmoatnt” and “it slef” is really only one word.;-)

I’m so sorry I misspelled the misspellings.

#150 Country Girl on 11.30.12 at 8:40 pm

#125 Buy? Curious?
Check out the Smoking Man Tribute Pt2 on YouTube.

What a blast! Very creative, the Smoking Man way.

#151 TurnerNation on 11.30.12 at 8:47 pm

Buy / curious there are no Meerkats in your videos.

#152 craig on 11.30.12 at 8:54 pm

There is a whistleblower r. agent in Calgary
that has been in the news (CBC) recently
trying to get info out about all of these issues
because she herself got caught in a nitemare.
The website may still have the news story in
archive.

The new and all glass Tyler Library on the UofC
campus is experiencing the glass implosions
on the ground floor very eerily like the photo
above. The builder even forgot to put the
heating system in and in the dead of winter
last year after the grand opening the whole
place was closed for months while someone
tore up half the building putting in
the missing heating system. Just unreal.

#153 Dodged-A-Bullit-in-Alberta on 11.30.12 at 8:55 pm

Greetings: Eight years ago, my wife and I left Calgary to come to Medicine Hat, Alberta. We sold a townhouse style condo in SE Calgary. Walked away with enough money to pay outright for our present SFH here. A few years later, we almost bought an apartment type condo in Calgary, same subdivision, same location, thought it might be a good “investment”; made an offer, put a downpayment, subject to acceptance of us reveiwing condo documents. Took all the paperwork home, and the Red Flag arose!!! Engineering reports about leaking windows, and spalling concrete. Put Stop Payment on deposit cheque, called Real Estate Agent , and bailed. We had pre-approval from credit union here at home to borrow 180,000 against our existing mortage free home. Never again will I ever contemplate touching a condo. Three years ago, I helped a widower move from his home into a condo. He has since died, but he told me it was the biggest mistake he ever made since his wife died.The building is still embroiled in legal issues, and the present owners will be facing this BS for years. I understand the original developer has gone bankrupt, and the Alberta Government provides no protection for owners. Never, Never, Never, touch a condo!!!

#154 Country Girl on 11.30.12 at 8:56 pm

#136 Beach Girl
Am very annoyed that my tax dollars went to torture Ashley Smith.

And, the same women’s prison recently in the news for another matter. It’s disheartening.
http://tinyurl.com/cddpojj

#155 Lost Soul on 12.01.12 at 12:31 am

Come to think of it, you better also include your commute time at say, $25 an hour. See if your home in the burbs is really such a great bargain. Because I can walk to work, we only have one family car. We only “Older but wiser-drive it on the weekends. We save an enormous amount on car payments, insurance, gas, and maintenance. Better add in your commuting costs to your BPOE SFH in the burbs. Maybe you should add in the cost of the stress from the commute too….hmmmm, maybe your “getting” the whole condo thing now?……”

Well with a company car and being just 5 minutes from my office and a gym in the basement. No I obviously do not get the condo thing. In 30 years of working I have never taken a job more than 15 minutes form home and never would.
Fortunately I was the general contractor on my home which was built to last. Not so much on the granite and stainless steel but stronger concrete copious amounts of 5/8″ rebar and 8 inch footings and walls. Not to mention seismic enhancements and water proofing above your typical build. In other words built to last with minimal repairs. Its been 11 year old and not so much as a a hair line crack or nail pop in the dry wall from settling as there has been none. A little touch up on the paint and cutting the lawn is about all I have done. After hearing the horror stories from many condo owners on this blog I would never touch one with a ten foot pole. Unfortunately these bills for repairing shoddy workmanship come at a time for many people when they can least afford to pay them.

#156 ozy - Single Detached on 12.02.12 at 1:22 am

“After all, buying a condo is not like scoring a house. You don’t own any actual dirt.”

AAAA, so buying a house is better than kandos? What about buying something 10% reduced in still good areas?

#157 ozy - The kando owners should seize control on 12.02.12 at 1:31 am

Ask for all receipts to start with, utilities, services, etc. The kando owners should seize control then pay auditors to investigate possible wrongdoings of former kando boards, if they feel they are bumping the maintenace costs. $200 a month should be more than enough, repairs excluded. Is not the rare things Garth mentions like glass falling, I guess corruption of directors awarding contracts to frinds for fat kickbacks or side-interests is the cause of jumping fees. You can repair/patch the leaking garage walls with 25000 or with 500000. Your choice. Stop blaming the crooks (thye must do the bad things they were born/made for), blame the innactive lazy inaction of the kando owners. Everybody has what it deserves I guess. Kanata lives here.

#158 Still Leaking After All These Years – “Our landlord, who bought new in 2008, is in a tough spot. Bought as an investment for about $450K, could sell for about $380K today.” | Vancouver Real Estate Anecdote Archive on 12.02.12 at 4:06 pm

[…] “[I've been] living in Vancouver as a renter in the same building for 7 years. Have seen since moving in telling signs the building had moisture issues. Finally are going through rain-screening right now. It is costing each owner $120,000. So glad I am a lowly renter, and not the couple who moved in 2 years ago who were in a bidding war and decided to waive inspection.” – machino at greaterfool.ca 30 Nov 2012 1:43pm […]