Calgary Purchaser Cancellations

[CMD UW]

Originally Posted by seven thirty

well said gentlemen. Letting nature takes its course may be the only way indeed. However, the problem I believe that will exist for the next year++ does not just affect those that are "walking away," but the many builders and developers that were over leveraged themselves and will buckle under the pressure of a relatively large and unanticipated exodus of sales contracts. My fear is the problem's impact on future (already approved) projects.

There are a decent number of them in Calgary (Edmonton too I would assume) that have already received permits/approvals and are having no choice but to cancel or postpone construction. Maybe its a good thing they are getting canceled or being postponed? ..might give the market the time it needs to absorb the surplus of inventory sitting around, not moving.

For the builders and developers that overleveraged themselves with little or no cash reserves should blame themselves. You cannot and should not operate a business in this manner.

In regards to postponing or delaying projects, yes, this will happen. We already have a couple of examples of this. However, one should understand that the majority of the projects that have been delayed are the result of two factors: 60% is related to the lack of available credit as lenders close the taps or poor financial management and 40% is the result of an over supplied market.

[lubicon]

Originally Posted by CMD UW

And to add another point, I believe that in the future, developers will be placing restrictions on when people can 'flip' their units upon possession, or they will reserve a number of units for investors only. This way it will reduce the mass invest-ation of the market.

Not sure how they could go about doing this. Once someone has legal posession of a unit, how can you place a restriction on what they can do with it (in terms of when they can or cannot sell). And how do you know who is purchasing for investment and who is purchasing for the purpose of living?

[bigcanuck]

Originally Posted by lubicon

And how do you know who is purchasing for investment and who is purchasing for the purpose of living?

You are required to sign a disclosure upon purchase - if you're an investor, you do not qualify for the GST rebate and must notify the fed government. If you sign the form indicating you plan on living there, the developer must take your word from it (and permit you to apply the GST rebate) - if you're lying, it's the fed gov't your lying to and not the developer.

Based on your signing of the form, some developers will alter the cash down-payment required. ie. 5% if you plan on living there, 10% if you're an investor.

Edit: Of course, this may be moot as the GST rebate can only be applied to units purchased up to $450k and many condos are above that now...

[lubicon]

Originally Posted by bigcanuck

You are required to sign a disclosure upon purchase - if you're an investor, you do not qualify for the GST rebate and must notify the fed government. If you sign the form indicating you plan on living there, the developer must take your word from it (and permit you to apply the GST rebate) - if you're lying, it's the fed gov't your lying to and not the developer.

Based on your signing of the form, some developers will alter the cash down-payment required. ie. 5% if you plan on living there, 10% if you're an investor.

Edit: Of course, this may be moot as the GST rebate can only be applied to units purchased up to $450k and many condos are above that now...

Didn't know that. Thx.

[Bokimon]

I wonder if we should have a thread discussing any info about condo purchasings. I'm sure some of us may be looking for a condo to buy especially with the situation in the market now favoring towards the buyer.
I admit that I am also looking for a condo to buy as the prices have dropped enough that I could now be able to make the down payment and get a mortgage myself.

http://corgiguy.gohds.net/?ch=1.0.14...ECLOSURE-ALLEY
A very interesting article about life in California thesedays. Some scary examples and ruined lifestyles. I cannot imagine what it is like to have a foreclosure. All I know is Foreclosure = the end of your life as you know it!

[shreddog]

Originally Posted by Bokimon

I A very interesting article about life in California thesedays. Some scary examples and ruined lifestyles. I cannot imagine what it is like to have a foreclosure. All I know is Foreclosure = the end of your life as you know it!

I've been talking to many of my friends in Cali and yeah, it is weird down there - part of population is in denial saying that things will rebound any day now (and if they can scrimp for one more month everything will be okay) whereas others are expecting the big one (earthquake) to also hit any day now so there getting "out of Dodge" as quick as possible.

One thing about the "Foreclosure = the end of your life as you know it" mindset. That is a very Canadian perspective. Having lived and worked many years in the States, one of big differences I have noticed is the mindset relating to financial ruin. In Canada when one experiences bankrupcty/foreclosure, you become a pariah; in the US, when one does the same it's looked on as merely a bump on trying to reach the gold pot and they're expected to try again.

While this economic "shuffle" is significant, I don't expect it to significantly change the American mindset and those that do get whacked with financial ruin this time, will all be expected to try again on the next wave.

And as an ex-Ontarian who choose to live in Alberta, that same trait in something I see more here than in my old home town out East. As such, I do think that we will rebound quickly (mentally, if not financially) from any major hiccups that will soon come our way.

Speaking of which, one thing that has surprised me is the difference between the condo markets in Calgary and Toronto - haven't heard of any major cancellations or significant walk aways in TO yet. Either they're better at keeping it quiet, or that the maturity of their market (remember, they had a major condo mkt crash in 90's) means they had more experienced purchasers and builders.

[shreddog]

Originally Posted by Bokimon

I A very interesting article about life in California thesedays. Some scary examples and ruined lifestyles. I cannot imagine what it is like to have a foreclosure. All I know is Foreclosure = the end of your life as you know it!

I've been talking to many of my friends in Cali and yeah, it is weird down there - part of population is in denial saying that things will rebound any day now (and if they can scrimp for one more month everything will be okay) whereas others are expecting the big one (earthquake) to also hit any day now so there getting "out of Dodge" as quick as possible.

One thing about the "Foreclosure = the end of your life as you know it" mindset. That is a very Canadian perspective. Having lived and worked many years in the States, one of big differences I have noticed is the mindset relating to financial ruin. In Canada when one experiences bankrupcty/foreclosure, you become a pariah; in the US, when one does the same it's looked on as merely a bump on trying to reach the gold pot and they're expected to try again.

While this economic "shuffle" is significant, I don't expect it to significantly change the American mindset and those that do get whacked with financial ruin this time, will all be expected to try again on the next wave.

And as an ex-Ontarian who choose to live in Alberta, that same trait in something I see more here than in my old home town out East. As such, I do think that we will rebound quickly (mentally, if not financially) from any major hiccups that will soon come our way.

Speaking of which, one thing that has surprised me is the difference between the condo markets in Calgary and Toronto - haven't heard of any major cancellations or significant walk aways in TO yet. Either they're better at keeping it quiet, or that the maturity of their market (remember, they had a major condo mkt crash in 90's) means they had more experienced purchasers and builders.

[mydssbin]

Does anybody out there know of anyone who has canceled their purchase and received full or partial payment back? How or what did they do to get it back?
Thanks