Cam told us about the flood of hot Asian money (HAM) from China flowing into the Vancouver and Toronto Real Estate Markets:
- "In the last two months, we’ve sold over 700 condos in Toronto. Sixty per cent went to Mainland Chinese buyers. In meccas like Richmond, 98 per cent of the hundreds of homes we’ve sold are to buyers who are Chinese... Buyers from Mainland China are a driving force in our real estate market. The staggering truth is we’ve seen just the tip of the iceberg… A recent story in the Wall Street Journal reported that Chinese are 'stampeding to Vancouver and Toronto."
The Company operated six mills – two in Ontario, one in Alberta and two in South Carolina – and was North America’s third-largest maker of oriented strand board (OSB), a product similar to plywood that’s used to build walls, floors and roofs.
He started building a golf course in nearby Earlton, Ont., acquired a 65-foot yacht made partly made out of OSB, and snapped up acres of land around Timmins, Ontario.
In 2005 he started work on the Haileybury House, which was to be used as an office complex, living quarters and a showcase for Grant products. Located in Haileybury Ontario (which is about 140 kilometres north of North Bay, Ont.), the 65,000 square foot house would sit on the shores of Lake Temiskaming.
Once completed it would be a monster-home that dwarfed everything else in the area . The massive mansion was supposed to come complete with a small golf course in the surrounding acreage, an art gallery, office area, swimming pool, squash court, two elevators, a giant hot tub, a small gym, a boathouse and 43 acres of land.
The strong downturn in the global economy in 2007 hit Grant Forest Products hard.
The company tried to keep going but by June, 2009, it succumbed and filed for court protection from creditors, citing nearly $600-million in debt. The mills have since been sold by the monitor, Ernst & Young, and all remaining assets are up for sale... including Haileybury House.
Grant was forced to abandon construction on the Haileybury project in 2008 so it hasn't been completed yet, leaving a partly finished relic. At the very least, the property will require $1 million in upgrades to make the house liveable.
There have not been any decent offers.
It's unclear if they are going to accept the highest offer, regardless of what it is.
Because it seems HAM isn't prepared to rush in and overbid on all overpriced real estate in our country, particularly in Haileybury. Could it be that, outside the inner cities of Vancouver and Toronto, the real estate collapse has started in earnest?
The folly in Haileybury may be a bellweather of what lies ahead.
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