Work on buildings in Vancouver, Surrey, Kelowna and Island halted
Cheryl Chan
Province
Construction of Vancouver mid-rise development V6A, a model of which is seen above, is on hold until sales improve. Photograph by : Jon Murray, The Province, File
World-market turmoil continues to take its toll on B.C.’s condominium market as construction on one development after another is stopped or postponed.
V6A, a nine-storey mid-rise in Strathcona on the edge of Vancouver’s Chinatown, is the latest condo casualty, but developer Onni said the project is still a go.
“Currently, the construction aspect is on hold, but we’re still selling it, we’re still marketing it and we’re still moving forward,” development manager Alex Orr said Friday.
Construction began in June, but was stopped three weeks ago to make sure there are enough buyers.
“Obviously, the market has gotten more challenging,” he said. “We looked at slowing construction down so the sales and marketing program can catch up to ensure we have adequate sales.”
About 30 per cent of the 128-unit building has been sold and all purchasers have been informed of the stoppage, said Orr. The building is slated to be completed in mid- to late 2010.
According to media reports, B.C’s superintendent of real estate is investigating the project because some prospective buyers were not being told the project was on hold. The department could not be reached yesterday.
In Metro Vancouver, the global credit crunch has affected two Surrey projects, Infinity and Sky Towers, after developer Jung Developments Inc. sought bankruptcy protection a month after its major lender, U.S. investment bank Lehman Brothers, collapsed.
Lucaya, a $30-million condo development in Kelowna, shut down construction due to a financing shortage, while the developer for Capella, a $1.4-billion luxury project on Vancouver Island, has suspended sales and construction until market conditions improve.
Other projects, including the $500-million Ritz-Carlton hotel in downtown Vancouver and the 349-unit Evelyn in West Vancouver, attributed construction delays to other factors such as parkade redesign and stabilization issues.
Construction along North Vancouver‘s waterfront — the future site of a major development project that will include a conference centre, 108-room hotel, an office building and a 20-storey residential tower — also went silent earlier this month.
But developer Michael De Cotiis of Pinnacle International said the stoppage doesn’t have anything to do with economic woes.
“We are waiting for approval for subdivision and service approvals for water pipes and road construction,” he said.
De Cotiis said he expects construction to resume in three to four weeks and for the current project, a 12-storey highrise, to be completed by the target date of August 2009.
According to Ward McAllister, president and CEO of longtime Vancouver real estate and development company Ledingham McAllister, there may be more projects put on hold as banks demand stricter credit requirements.
“Presales are definitely not as brisk as in the past,” he said yesterday. “A lot of the banks are requiring a higher number of presale agreements [before construction can go ahead].”
But McAllister said the construction slowdown could eventually lead to a stabilization of the Vancouver real-estate market, as the supply of units begins to lag behind demand. Citing statistics that show about 58,000 people move to B.C. annually, McAllister said about 20,000 new units of housing are required each year.
“If units aren’t being built, there’s going to be a shortage very soon,” he said, adding that may lead to another sellers’ market.
© The Vancouver Province 2008