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March 18 2009

Vancouver-based developer Amacon has teamed up with MAC Marketing Solutions (MAC) to develop a unique and first-of-its-kind construction cost savings initiative for the Beasley development in Yaletown, Vancouver. Amacon announced that it will be offering a minimum 22 per cent, or $100,000 to $250,000 discounts, on its Beasley development in Yaletown, Vancouver.

Original buyers will be able to refinance their homes at the newly discounted rates.

This discount campaign is being called the “Pass it on Campaign,” which resulted from long construction negotiations between Amacon and contractors, suppliers and tradespeople. Such negotiations resulted in cheaper construction rates, and the savings are being passed on to the purchaser.

The Beasley is two-thirds sold out with the remaining units going on sale early next month (April 4), but Amacon says it isn’t a ‘fire sale’ because of the tough real estate market. Remaining suites range in size from 436 to 1,334 square feet, with the building being ready for an estimated occupancy in 2012. 

Home sales in Metro Vancouver were down 47 per cent in February compared to the same time last year. The average price of a home sold in B.C. was $421,023 in February, down 12 per cent from February 2008.

Further reading:

“Developer slashes condo prices” in the Times Colonist (March 20 2009)

“Condo developer slashing prices for pre-sale buyers” in the CBC News (March 17 2009).

“Vancouver condo price drop leads to lawsuits and big discounts” in the Vancouver Sun (March 17 2009)

“Developer drops the price of pre-purchased condos” in CTV News (March 17 2009)

“Condo developer offers rebates to pre-sale condo buyers” in News1130 (March 17 2009)

“Yaletown condo developer offers steep discounts” in Metro Canada (March 17 2009)

(Source: Business Wire)

CDL Works with Leading Experts Worldwide to Seize Opportunities in China

Dr. William Yip, chairman of Canada Land Limited (ASX:CDL), a publicly traded Chinese real estate development firm, today announced plans to establish the CDL China Real Estate Opportunity Fund to invest in distressed Chinese real estate and other unique real estate opportunities in Greater China.

CDL intends to develop investment funds in the future that will seek to exploit the current correction in the Greater China real estate market in order to achieve maximum long-term gains.

“The current global economic downturn and numerous fundamentals have set the stage for one of the most lucrative investment opportunities in recent years and in the history of Chinese real estate,” said Dr. Yip, chairman of the fund and a world-renowned author and international businessman known in academic and business circles as an authority. “We believe that capitalizing on the current correction in Chinese real estate requires extensive market analysis and due diligence as well as a focus on quality over quantity, an investment strategy that’s weighted toward multi-family, multi-tier residential developments, and an ability to leverage strong relationships with Chinese government authorities and the local real estate community. To that end, we will work with a group of seasoned investment professionals and our preferred real estate services provider, Colliers International.

Read the full article “Global Real Estate Experts to Launch Fund to Invest in Distressed Chinese Real Estate and Other Real Estate Opportunities in Greater China” from Business Wire.

March 17, 2009
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(Source: Wall Street Journal)

Borrowers Who Hire Firms to Renegotiate Mortgages Rarely Come Out Ahead

President Barack Obama’s foreclosure-prevention plan, announced last week, is designed to give several million troubled borrowers another chance to lower their mortgage payments. But government officials and counseling agencies warn that it also presents a golden opportunity for firms to fleece unsuspecting borrowers.

Under the Obama plan, the government will offer incentives and subsidies to persuade mortgage-servicing companies to offer lower monthly payments to borrowers in danger of losing their homes to foreclosure.

Over the past few years, there has been a proliferation of firms that charge fees for what they promise will be quick results in negotiating with banks to get easier loan terms. In many cases, the firms take the homeowner’s money but never deliver the services promised. Even when the firms do deliver what they promise, they charge fees — often more than $1,000 — for services borrowers can receive free. In July, Congress increased to $360 million the funds it has allocated for foreclosure-prevention counseling to organizations that provide the service without charging consumers.

The publicity about the plan could be “the greatest advertisement of all for these scamsters,” says John Ryan, an executive vice president of the Conference of State Bank Supervisors, which helps coordinate bank regulators. But he adds that his group is working with state and federal regulators to alert consumers and crack down on scams.

In the meantime, fee-charging loan-modification firms “are popping up everywhere,” says John Snyder, a manager at NeighborWorks, a nonprofit group formed by Congress to support community-revitalization organizations.

The Federal Reserve and the Federal Trade Commission have published warnings about what they call “foreclosure scams.” State attorneys general also are issuing warnings and in some cases prosecuting firms alleged to have cheated borrowers. U.S. Sen. Herb Kohl, a Wisconsin Democrat, has introduced legislation that would bar “foreclosure consultants” from collecting fees before they complete promised services. Some states, including California, Maryland, Iowa and Florida, already have laws with restrictions on upfront fees for these services.

Read James R. Hagerty’s full article “Housing Plan Creates Opening for Scammers” in the Wall Street Journal (March 11, 2009)

(Source: Reuters)

LONDON – Property firms Sovereign Land and Strutt & Parker Real Estate Financial Services (SPREFS) are jointly raising a 300 million pound fund to invest in UK shopping centres, the companies said on Monday.

The companies, which are raising the amount from financial institutions, said the Sovereign Land LP fund plans to acquire UK malls valued between 50-100 million pounds, in anticipation of prices bottoming out in the retail property market.

“The UK retail property market will continue to deteriorate in the short term and reach a 20 year low beginning in the second half of 2009,” the companies said in a joint statement.

“There is an outstanding opportunity over the next three years to selectively acquire … a diversified portfolio of high quality shopping centre assets to pre-empt the eventual stabilisation of the UK economy,” they said.

Reporting by Daryl Loo; Editing by Jon Loades-Carter. Read the article “Property firms to raise $421 mln for retail fund” in Reuters.

(Source: Globe and Mail)

CALGARY — There may be an upside to Canada’s emerging subprime-mortgage problem as lenders increasingly move in to foreclose on overextended homeowners: New-found investment opportunities for real-estate speculators.

And it’s not just the narrow but ballooning pool of subprime-mortgage foreclosures, but the overall boom in the foreclosure business that could get investors in a buying mood and desperate homeowners more willing to sell fast.

“A lot more properties will be sitting for longer and some of the properties are going to be vacant for sure,” said Kap Hiroti, who tracks foreclosure proceedings in British Columbia and operates Foreclosurelist.ca, which links sellers with potential buyers.

Although nationwide data are scarce, foreclosure rates are soaring in Alberta and British Columbia. And about half of those affected received mortgages they couldn’t really afford from lenders who were willing to finance people with lousy credit histories – borrowers who would be considered too risky by mainstream lenders such as the big banks and credit unions.

The rate of foreclosure proceedings has doubled in Alberta in the past two years to about 5,300 in 2008-09 and subprime lenders made up 56 per cent of foreclosures last year. In B.C., subprime lenders were responsible for 42 per cent of foreclosures last year.

Read Dawn Walton’s full article “Increases in foreclosure rates create buying opportunities” in the Globe and Mail (March 16 2009)