Tuesday, April 30, 2013

"First salvo" fired in condo price undercutting war in Richmond

Yesterday's realtor shills may be insisting that nothing has changed in the real estate market in Point Grey, but a glance southward across the muddy Fraser reveals a very different story.

This is Parc Riviera, a riverfront project in north-east Richmond. It's a 20-acre master planned community with five acres of parks and riverfront trails.

Richmond realtor James Wong tells us that 2013 will be a challenging year for local home sellers because the Vancouver suburb currently has over 10 months supply of homes on the market... with more listings expected in the next few months. 

Wong's assessment is that buyers are in no hurry to buy in spite of all-time-low interest rates at 3.0% or less for 5-year fixed mortgages. Many resale homes are languishing on the market due to lack of buying interest and Wong says this is because home buyers are simply not willing to pay the prices expected by sellers.

Wong suggests that this milieu is what has lead Parc Riviera to fire the "first salvo" in what will be  a serious price undercutting war in the condo market in Richmond.
The developer is now offering pre-construction sale of condos starting from the mid $200,000’s. The selling prices for the first phase of condos and townhouses at Parc Riviera could set the stage for Richmond home prices to come down.

The developer’s ad placed in Vancouver 24 Hrs and Richmond News advertised townhouses selling from $369 per sq ft, and condos from $386 per sq ft. Current selling price per sq ft for resale wood-frame condo in Richmond is around $405 to $420 per sq ft. The pricing trend for new developments in Richmond can be expected to follow similar offers as competing projects are forced to adjust their selling prices. Resale homes will be under pressure to compete for buyers.

Home prices at Parc Riviera are priced some 10% to 15% lower than current selling prices of resale condos and townhouses in Richmond. Current resale lowrise wood-frame condos and townhouses are priced from $435 to $475 per sq ft. Recent sales of condos and townhouses in Richmond were found to be between $400 to $450 per sq ft. The overhang of too many homes chasing too few buyers could only mean lower selling prices for home sellers. Motivated sellers taking low-ball offers are setting the trend for lower prices in the coming months.
It will be interesting to see how other new condo developments respond.

More significantly what will be the reaction from all those condo owners with overpriced units languishing on the market right now? Who will pay those high asking prices when new development's are coming in significantly lower?

Realtor Arnold Shuchat's description of an underwater market in Richmond for SFH's may be about to intensify by spreading to the condo market too.


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  1. I would not want to be trying to sell any older resale condo under these conditions. Builders can literally dump new units into the marketplace at a loss and how does the average resale owner compete when there are brand new units being flogged for less? It's a race to the bottom.

  2. Exactly why "soft landings" never happen.

  3. The location is in the industrial area of Richmond and the developer picked the land up for a song. He can blow out these units for a smaller margin of profit and still come out way ahead. The sheer volume of daily listings in Richmond has noticeably escalated in the past week. Sellers are starting to drown.

  4. Someone mentioned it already, but this is part of the industrial area, if not very close to it.

    Quick Google map of 10111 river drive richmond bc, reveals you'll be viewing the Western tip of Mitchell Island. Compare that to the Parc Riviera website, you're not gonna be looking at a nice Yaletown place. It's gonna be some time before development of the whole area becomes nice. And even then, you'll still be looking at freight and logs in the river. Unlike actual Yaletown.

  5. Freight and logs are the least of your worries, the area consists of industrial manufacturing. I can't see that HAM coming from the polluted wasteland of China would want to buy in an environment of polluted wasteland of Richmond. Hmm...doesn't look quite right.

  6. Bring on the supply!

  7. A five story wood frame in liquefaction central? You couldn't pay me to put my name on that title.

  8. The Yatter Matter numbers are out. It doesn't look like a bust just yet.


    1. I wouldn't jump to a conclusion so quickly. With the number of Units Sold down, a few high end sales can influence the average price. That's why I like the median price as a better indicator.

  9. Victoria numbers are out too. Better than expected:


  10. Calgary is up up and away.


  11. New condos are price cutting. How are the resales condos going to compete?



  12. "Victoria numbers "better than expected""...

    lol? Way to aim high.

    That PDF ad is funny. First, what are white people doing on a Richmond real estate ad. Second, they misspelled "park" and "river", come on guys. Third, wood frame in Richmond? That better be a gun you're holding to my head.

    1. Parc is French for Park...so is Riviera...get an education....come on GUY!!!!

    2. you moron, they're not trying to promote it to just Asians as every Asian knows about Richmond. And secondly, the guy above said it about the French. Can't deal with stupid ppl like Devore (even your name sounds French, how can you NOT know)