Onni Selling Condos at Deep Discount!?

[LotusLand]

VCB reports (via CBC article) that Onni is soon going to sell of a bunch of its condo inventory! I thought this was interesting, I've heard of this kind of thing going on in the states but this is the first I heard of it up here. Anyways, i'm off to work here is a link to the article:

http://vancitybuzz.blogspot.com/2009...discounts.html

I apologize in advance if this post is in the wrong section I'm new

[sacrifice333]

Very Interesting...

I'm pretty sure the 20-40% discount figures that are being thrown around are almost surely from the peak pricing and not off of current pricing.

More info here and here.

[Yume-sama]

It's probably just like when the Airlines always have those BIG BIG sales, that end up saving you about $20 even though it says "half off"

Or all of those "going out of business" sales the Brick has.

[LotusLand]

Originally Posted by Yume-sama

It's probably just like when the Airlines always have those BIG BIG sales, that end up saving you about $20 even though it says "half off"

Or all of those "going out of business" sales the Brick has.

Yeah they always put out the crappy stuff in those sales anyways

[osirisboy]

it seems like most of the units are in richmond and new west?

[WarrenC12]

I think this is a start of a trend. Onni is jumping ahead of the spring selling season to unload their inventory.

I think other developers will follow... and developers are the ones who are willing and able to make deep price cuts fast to move inventory. Individuals looking to sell this spring will have a sobering wake up call.

[Coldrsx]

Originally Posted by osirisboy

it seems like most of the units are in richmond and new west?

to of the most elastic markets in the LMD.

[cornholio]

Its going to be a interesting year.

Anyways if anyone is unhappy that our real estate market is in free fall(give it a few months and it will be called a crash) then you have to remember that there is almost no place in the world that isnt affected.

Whats funny is that Prague a city im familiar with is where Vancouver was a couple months ago with their realestate prices. There are a few hold outs that are still saying the city is immune, its a world class city, its future is bright, its economy is growing, there is no place left to develop in the historic center, so on and so forth, yet their market is starting to free fall also. There was allot of realestate bubbles out there and the credit crisis just helped pop most of them at the same time.

Anyways the market should drop about 20-30% out here(more in some areas less in others). It probably should drop even more but people wont want be selling at a loss or perceived discount if they dont have to, once you strip the most vulnerable of their property then the prices should somewhat stabilize. Those that are forced to sell will have to significantly slash the prices to be able to move the property(and there will be job loses and already are, and people will be forced to sell, while alot of potential buyers will be unable to buy at the same time).

Anyways the worst is yet to come...people will be shocked by the numbers that come out this quarter regarding the economy in general.

[phesto]

There were rumours going around last year that Onni was having cash-flow related issues which, if true, would go some of the way to explaining this strategy of dumping unsold inventory.

Regardless of how much further one expects that the market has to go down, I don't see this type of forced/mass discounting becoming a trend for other developers.

-----------------------------------------------------------------------------------------------

Condos fire sale offers up to 40-per-cent discounts

‘This is a reaction to the market that’s slowing,’ says Onni’s Evans

By Brian Morton, Vancouver SunJanuary 15, 2009 1:01 PM

in what’s being marketed as a real-estate liquidation sale, the Onni Group of Companies is offering 375 Metro Vancouver condos valued at $150 million at prices it says are discounted by up to 40 per cent from those originally advertised.

Onni executive vice-president Chris Evans said in an interview Thursday that Onni was facing high costs in carrying the units under current financing terms. “It made sense to sell our remaining inventory.”

As well, Evans said, the sale makes sense because of the slowing real estate market.

"No one could never have imagined the real estate market would drop as much as this. This is a reaction to the market that’s slowing.”

The sale represents all the company’s remaining inventory in projects completed over the past 12 months, Evans said. “And this is not a pre-sale. Every home is completed, brand new and ready to move into.”

The one-day sale will take place on March 7.

The sale includes condominiums in Richmond (Flo); Port Moody (Suter Brook — Aria 1 &2, Room Loft Living and Libra); New Westminster (Victoria Hill and The Point); Port Coquitlam (South Verde); and Surrey (Escada).

Examples of the prices include:

• Richmond — a 900-square-foot two-bedroom originally priced at $472,900, or $525 per square foot, is now approximately $360,000, or $400 a square foot.

• Port Moody — a 1,106-square-foot two-bedroom-and-den originally priced at $453,900 is now approximately $340,000, a 655-square-foot studio originally priced at $319,900 is now approximately $240,000, and a 990-square-foot wood frame two-bedroom originally priced at $419,900 is now approximately $315,000.

• Surrey — a 1,100-square-foot two-bedroom and den originally priced at $360,900 is now approximately $260,000.

• New Westminster — a one-bedroom originally priced at $270,000 is now approximately $215,000.

• Port Coquitlam — a 1,000-square-foot two-bedroom originally priced at $389,900, or $390 a square foot, is now approximately $280,000, or $280 a square foot.

Evans said some of their units were selling at the original prices. “There’s some demand for homes. The catch is that people are looking for a great deal.

“This is a rare opportunity to afford a home you thought you never could,” Evans said. “This is an extraordinary time in the marketplace,” he added, citing the combination of dropping prices and lower interest rates.

bmorton@vancouversun.com

[Coldrsx]

" Richmond — a 900-square-foot two-bedroom originally priced at $472,900, or $525 per square foot, is now approximately $360,000, or $400 a square foot."

damn... time to buy.

[Vancity]

Originally Posted by Coldrsx

" Richmond — a 900-square-foot two-bedroom originally priced at $472,900, or $525 per square foot, is now approximately $360,000, or $400 a square foot."

damn... time to buy.

Read my mind. Gotta look into investing right now. wow. will the prices continue to drop?

[WarrenC12]

Originally Posted by Vancity

Read my mind. Gotta look into investing right now. wow. will the prices continue to drop?

Most definitely. I'd expect things to continue to slide for all of 2009. Real Estate markets react relatively slowly, so rest assured you'll have plenty of time to pick up cheap property once the market flattens out.

[DKaz]

If anyone has any extra cash on hand and can manage to get a good mortgage... why not? Rental vacancies are still at an all time low.

[cornholio]

^^yup, generally real estate prices are slower at dropping then other things in a failing economy. right now the west coast still hasnt really been hit by the economic impact, infact the worst is still to come in manufacturing and tourist based economies, but it will and people will lose jobs and people will be forced to sell when no one wants to buy and the real estate prices will see some big big drops. I just feel sorry for those people that are about to get screwed, especially the ones who dont even know it yet.
Lots of people figured, hey I got a good job, I got stocks, etc., i wont have to sell this extra property if prices fall. Now some of these people might not have that job anymore, their stocks and investments are worthless, and suddenly they have to sell that house that they though they would never have to sell at a loss or go bankrupt and the bank will unload it at a even biger loss.

Fun times.

[Coldrsx]

360k would be rentable and then sell it once the market rebounds in a few years.

[cornholio]

Originally Posted by DKaz

If anyone has any extra cash on hand and can manage to get a good mortgage... why not? Rental vacancies are still at an all time low.

because the housing market was overinflated, and still is now.
i mean you can if you want...personally i would rather take my chances playing roulette in Vegas, but to all their own.

You know personally i dont even have huge faith in the real estate market in the long term. The next 50 years wont be like the last 50 years, markets always have many different levels/layers that fluctuate and go up and down(remeber we have no long term stats for prices and mass property ownership is fairly new). In proportion to the economic, poulation and productivity growth housing cant grow like it has for the past 50 years and the baby boom wave will be slowly departing us. They have put upward pressure on the market(and destabilized all markets) because they are a abnormally large generation/demographic group and in turn will put downward pressure on the market as they leave.

[Yume-sama]

I personally would not buy anything right now.

But aside from that, this really seems like a super desperate move for a company that HAS to be short on cash.

Maybe they invested with Madoff

[DKaz]

Yah $360k in Richmond is still steep.

You can get a 3 bedroom single family house with a 1 or 2 bedroom mortgage helper in Mission for under $300k right now. The wife and I have been considerring selling our condo and picking up one of these wicked deals.

[cornholio]

It would be funny if the world monetary policy finally collapsed in all this mayhem. It should happen one day since its unsustainable and when it does it will be during a time of instability and recession, like right now.
Not that it matters if that happens, if it does you deal with it as best you can and know that everyone's in the same boat. One thing is for sure though, it would fix the gap between the rich and the poor overnight, and that can only be a good thing.

ok thats my last post here for a bit, i tend to get carried away in these types of threads

[mrjauk]

Originally Posted by DKaz

If anyone has any extra cash on hand and can manage to get a good mortgage... why not? Rental vacancies are still at an all time low.

I don't know which rental markets you've been watching, but the supply is absolutely exploding. I assume that you're basing your assessment of the vacancy level on CMCH data. Their methodology has flaws; all it is good for is giving you an idea of the trend.

Now, rental prices are still high but as landlords face the economic reality, they'll be willing to lower their prices to reflect the new (softened) demand.

Anecdotally, I began renting in October in the West End; for the exact same apartment as mine (except two floors higher) the landlord is seeking 10% less than what I pay. I know because I called pretending I was a prospective tenant. I think that he could be talked down another 5%.

By the way, I'm not sure if you mentioned buying the Richmond place for $360,000 as a rental property, but it wouldn't cash flow. You'd be able to rent the place out for about $1500/month, but assuming 10% down, your monthly mortgage payment at 6.5% (not including property taxes, maintenance, insurance) would be about $2500.

Yup, makes great financial sense.