jump to navigation

ArriVa – No One Home? March 12, 2008

Posted by DustinRJay in Calgary real estate, condos.
Tags: , , ,
trackback

ArriVa is one of the most recent condo’s that have finished construction in downtown Calgary.  Construction has finished a couple of months ago and there are currently 22 units in the building that have been listed by speculators for a total of $15 million as shown by the picture below.  A review of other condo’s in the downtown Calgary region shows that there is similar amounts of speculative activity with many individuals having no interest in holding the property long term.

Arriva - No One Home?

Calgary condo inventory has hit all-time record amounts and there are currently 2519 condo units for sale in Calgary.  In addition, condo inventory is rapidly growing due to near record amounts of multi-family home construction in Calgary.

With Calgary condo inventory roughly triple last year, sales down 37% year over year for February, and listings up 40% year over year for February, I find it likely that many of these speculators will be unsuccessful with flipping there property and some will end up in foreclosure.

Credit: Original photo by Lumin8 on Flickr

Advertisements

Comments»

1. JimM - March 13, 2008

What’s remarkable to me is the cheapest ones are in the low 400s, which is still quite a price tag for an apartment condo. And the prices go up from there. Boom times or not, this MUST be a limited pool of buyers. Who did they think would buy all these? Singles? Retirees? Maybe they were counting on those fictional Calgary power-couples that don’t really exist? It’s wierd. Like a mass delusion of some kind. Not to mention the 10 days of drunken noise every July, the endless hockey games. etc. Doens’t make any sense to me.

2. wanttobuyacondo - March 13, 2008

Go Foreclosures Go!

3. squid - March 13, 2008

that is so in your face…it cant be denied..we all called it right in 2006 …this market will be the first to get slaughtered
sfh will be next..they may as well face it…they are going to lose a pile of cash

4. lake mary fl remax - March 13, 2008

Seems a common thing not many people want a condo. I would think it be an attractive alternative no yardwork all the ammenties. In our area also condo seem to sit but homes are selling. Lots of foreclosures for sale.

5. DS - March 14, 2008

I lived in the states during the high times of real estate gold rush. But it wasn’t this bad. If foreclosure hits Calgary, which in my opinion just a matter of time, it will be far worst than San Diego, Florida and Boston. This is scary, just check the charts of history.

6. Anonymous - March 14, 2008

I wonder what those flippers paid originally for the places they are now trying to sell. It would be interesting to compare asking prices with an original price list from the building owner.

7. Ryan - March 14, 2008

Just went over to MLS to see some of these units. Wow…all I can say is wow! These are not very nice looking condos at all. Even the $2m dollar unit is hideous. It looks like a big open space with a bunch of windows and a long staight steril kitchen.

Good luck with that hey…10 pages of condos in Vic Park alone!

8. Carioca Canuck - March 15, 2008

Radley…….

Great post……!!!! The Vantage Pointe condos on 11th Avenue are like that as well.

How many buildings like this are in the process of construction or nearly completed ? 15 or something like that ? There are holes all over the place…….

The last time around (1982) I remember working downtown on the 10th floor of TD Square, and looking out the window thru empty floors on vacant office towers.

Deja vu……..

9. Mortgage Calgary - March 15, 2008

Your blog never disappoints. Excellent content as usual.

10. Miguelito - March 16, 2008

Awesome post. Again.

Given that the oil bubble is about ready to burst for numerous reasons, expect a shortage of money to pay for million-dollar condos.

1) there’s still more than adequate oil supply in the short and medium terms
2) the United States is about to enter a recession and drive demand down
3) Chinese growth will start to slide, even go negative, because of #2. Expect oil demand to shrink even further.
4) The bubble is in part largely speculative. Once #1 and #2 happen, expect a big round of profit taking and selling, which will create a sharp drop.

That should be enough to temper the boom. Probably won’t kill it, but it will make things tighter than they have been. And we’ll see it in how these uber-priced condos won’t sell.

11. lukecs - March 17, 2008

Thanks for the great info. Keep up the great posts. Your graphs are excellent.

12. Noemo - March 18, 2008

There can be corrections in markets without gloom and doom.

I agree that there are changes in world markets happening but a couple of things that do need to be taken into account.
First, Oil is a limited resource and OPEC (and others) do not want to pump it out too fast and deplete the reserves too quickly. Supply part of the equation.
Second, demand for oil is not going to drastically change in the short to mid term as we have a couple of billion people in the world just beginning to get hooked on it. Demand part of the equation.
Third, oil sands construction is not going to suddenly stop. This is the prime mover in Alberta right now. There is probably about 10 years worth of projects already going, just starting, being engineered, or have been announced. Demand in workforce part of the equation. Any oil sands projects that are put on hold due to rising costs or lower oil prices will eventually go ahead which will help spread it all out instead of having a dramatic boom and bust cycle.

These 3 things will create a stabilizing effect on the Alberta economy. They won’t however have any short term effects on the problem caused by speculators that jumped in to make a quick buck in the real estate game and who are now having to cover their positions. A mild correction is happening and real estate prices will probably drift slowly lower over the mid term.

The Calgary economy has had the fortune of seeing other markets unwind and this has had an effect of causing developers to rethink many construction projects. There are several major ones on hold/cancelled in the high rise condo and office tower sector. Home builders are not building on speculation anymore. There is still a lot of wealth around and unemployment is low but there is a lot of younger buyers waiting on the sidelines to see how this all shakes out.

Everyone with an opinion about real estate has an underlying reason to make it known to others. Those who are in the market want to drive it up, those that aren’t want to drive it down so they can get in, and those who are in the market but are jealous of others who have made the big bucks and want to see them lose it all! Me, I would like stability and sustainability. I have been in the construction business for 30+ yrs. Slow and steady works for me.

13. JM - May 2, 2008

Smart investment for those with some vision. Compare the area to Eau Claire, which used to be riddled with undesirables and Yaletown in Vancouver, which used to be an old warehouse district and riddled with undesirables now it is full of million dollar condos.
Torode bought most of the surrounding land and is developing it into new high end buildings.
I think Arriva tower is a bargain right now.

14. Michelle - May 29, 2008

Agreed. CIBC world markets expects housing in Canada to double in the next 20 years. Baby boomers are retiring but they only account for 12 percent of housing demand. Condos will continue to look attractive to first time home buyers who are traditionally between the ages of 25 to 44. Also, mortgage lenders are starting to realize that the 25 year mortgage is pase and 30 to 40 year mortgages are becoming more and more common. They offer 100 year mortgages in Japan! Interest rates are expected to stay low in the long term and immigration is expected to increase. Assuming the average inflation rate is two percent (3.5 in Calgary right now), the expectation is that housing will double by 2026. Wages, of course, never reflect inflation but many, many people in the future will never own their own home.The location of Arriva is prime and with the revitalization of the Stampede area will only increase its value. Arriva tower IS a bargain right now!!

15. radley77 - May 29, 2008

Regarding CIBC world markets expecting house prices to double in the next 20 years: I’d say that is pretty much a given, considering they are estimating house prices to increase by roughly 3%/year. This is in line with long-term trends in the housing market, which I have previously posted about. This does not negate that housing will likely have a large correction in the short term, or a long period of very, very slow growth. I am also quite sure that other investments such as stocks will readily outperform real estate over that kind of time horizon. For example, I would estimate that S&P 500 would roughly quadruple during that sort of time period.

Regarding credit expansion of riskier mortgage products: Well most of that occurred in Canada in 2006 & 2007. Since 2008 we’ve seen a lot of Canadian mortgage lenders stop offering various mortgage products (e.g. credit is now contracting and drying up). Would you really invest your hard earned money in a mortgage backed security composed of 100 year loans?

Also, considering the record amounts of inventory listed on resale market and record amounts of multifamily units under construction: Until developers slow down building, there will continue to be downward pressure on prices. I hope to post a graph of a comparison of population growth to residential units under construction shortly to illustrate the problem of the growing housing inventory glut in relation to population growth.

In the course of the following year, there will be tons mored condos for sale in that very same area. Have the Vetro flippers started listing yet? As Sasso was packed (30+ for sale) last time I checked.

Also, when I was last in the sales office, the developer said that they had a ‘handful’ left to sell. MLS currently has listed a price well below all the others included in the picture above. The MLS number is C3321078 for $384,900, which I believe is actually the developer.

16. Anonymous - June 30, 2008

Actually construction IS NOT finished at the arriVa, there
are still unfinished units.

17. Arriva Owner - July 6, 2008

I own a unit at Arriva as my first home, I plan to sell eventually but not in this failing Market. I purchased my unit for well under 250K when it first opened. I was able to save up enough money to almost pay it off by the time it was finally finished 3 years later. The building is amazing in design, has low condo fees (compared to even budget condo buildings) and they switched from Bosch appliances later on to a full Snaidero kitchen shortly after I purchased. I certainly got my money’s worth.

I agree that flipping now is a stupid move, the market is on a downturn. With that said I will be watching prices over at Arriva’s sister condo project Viva. Bad market conditions mean great opportunities! The city is still growing and in a few years the market will come back soon enough.

In any case Arriva is a great investment. Would be an excellent time to pick up one of these units. I would like to highlight that the University underpass project has already been approved (connects 4th street to 6th ave via underpass corner under a huge new university campus) and the city is dumping more than a few million into a river path upgrade project for the Elbow. The property potential of this area is very huge. Lets not discount the increasing people that are sick of paying 150$ a week for gas, then pay 300$ a month for parking so they can sit in their cars for 3 hours a day driving from outskirt neighborhoods to downtown. This is all about perspective as far as I see it.

18. rusty - September 17, 2008

what happened to all of those MLS listed arriva condos? Did anyone buy them? How many are now rented. Pretty interesting stuff. I would personally not pay 500 dollars a square foot to live there regardless of how nice the kitchen cabinets are.

Also I would be interested in seeing the prices in the sister tower.

19. flippant - September 25, 2008

My Big question is- who is left holding “The Bag”. Ultimately, the stupid banks? Does that mean my Bank stocks go down again, and we as tax payers have to pay for it?

The boomers, taugt Gen, X, Y and Z all this stupidity.

The lucky ones will be those who settle for less material assets

20. Anonymous - March 25, 2009

the second tower is not proceeding, and I heard a rumor there is a huge lien on the first tower…that developer will not be around in 6 months (or less)

21. Orlando commercial real estate listings - October 12, 2011

Execellent.. keep going 🙂

22. Anonymous - January 7, 2012

All that glass – bad architectural detail – it will come back to haunt these people.

23. kurt1963 - March 2, 2012

Monarch wang is pulled for the status, equivalently gent is aspirational and has been styling good terms swayable till disgust his shapes exclusive of zoon suppressed thanks to the punk model, bring in connection with carriage tax. http://aguahil.com

24. Veridical Estate Condos in Schererville IN - June 9, 2014

Now I am going away to do my breakfast, once having my breakfast
coming over again to read more news.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: