Brisk sales at Olympic Village
VANCOUVER -- The rapid-fire sale of 128 condo units in the Olympic Village, including 97 of them over the weekend, has surprised real estate analysts who say it may help spur the real estate market.
On Tuesday condo marketer Bob Rennie said his agents had sold 128 of 230 units offered for sale under the first phase of a receivership plan to recoup as much as possible of Vancouver taxpayers' $740 million in the Southeast False Creek development.
"I think it is a phenomenal result. I am very impressed. It is a remarkable statement about the real estate market and the desire of people to live in Vancouver," said Scott Brown, the vice-president of residential marketing for Colliers International in Vancouver. "They have basically lifted the stigma on that place overnight. That's amazing."
Last week Brown suggested new price reductions of about 30 per cent agreed to by court-appointed receiver Ernst & Young might not be enough to spur sales.
The volume appeared to take even the veteran marketer by surprise. Rennie had publicly told court-appointed receiver Ernst & Young he intended to sell 60 units in 60 days. Privately though, he told his agents he wanted to sell 100 within 30 days of putting the first half of 474 units of the distressed project on the block.
But with long lineups starting Friday and bolstered by 31 "market research" sales earlier in the week, his sales staff wrote contracts for nearly $100 million, almost as many contracts over the weekend as he'd hoped in a single month. Brown said that number is what a typical development might sell in a single year.
Tsur Somerville, a professor at UBC's Sauder School of Business, was also surprised but worries whether Rennie's company can sustain the pace of sales.
"This was a greater success than I think most people expected. You have to start with that," he said. "But the challenge will be continuing sales momentum once it is no longer on the front pages and as other developments begin their presales in the area."
The immediate lift in sales still leaves taxpayers on the hook for upwards of $730 million in construction loans and foregone land profits from when the city sold the property to Millennium Developments. That money will have to come from the balance of the current sales plan as well as 244 of the best units that have been held in reserve.
"If they sell all the units at that discount the bottom line is still a loss for the city on the land sales," Somerville said.
Rennie said the average price paid per unit over the weekend was $778,000. The most expensive unit was a 10th floor unit in the Kayak complex at $2.99 million. A studio sold in the same complex was the cheapest at $329,000.
Overall, 20 units over $1 million in value and 57 under $600,000 were sold. The rest were in between.
The strong sales has caused Rennie to consider asking the receiver for access to some of the 127 units it planned to rent out over the short term.
In a statement he said the 128 sales will only be final after a seven-day settlement period in which buyers' offers could fall through because of financing issues or a change of heart. He estimated that between four and 10 per cent of sales aren't completed but are almost immediately replaced with new sales contracts.
Brown said the strong sales aren't an indication that Rennie priced them too low.
"I can't tell you how many times after a big sale I've had a developer suggest that," he said. "Be happy with what you have and move forward because now there is truly momentum in that community.
"I think there will be renewed interest there and it could very likely have a ripple effect for other development proposals that are in the planning stages."
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