Friday, March 18, 2011

Shooting holes in the sky - METROPLACE - Prices that give local buyers pause, don't scare wealthy Chinese. But should they?


"Sustainable" this, "sustainable" that, "sustainable" everything. Sustainability... it's the most annoying catchphrase in B.C. since NDP Premier Glen Clark had EVERYBODY in the province mouthing his pat phrase at every interview, "At the end of the day". Well now, doesn't it begin to look like some of our condo developers and our municipal governments are counting on BIG Chinese money, or rather an endless stream of Chinese real estate Buyers, to become a "sustainable resource"? It seems obvious that the Chinese are becoming a natural resource to be exploited, right up there with mining and forestry.

I don't want to pick on the folks at Intracorp, but their 46 storey METROPLACE Tower will be the next venue for a feeding frenzy. I'm sure they can rationalize their pricing a dozen different ways - "Quality", "Demand", "Location", "Development Fees"...take your pick. But what they can't explain away is the fact that they are squeezing people into ever smaller units, while jacking up the prices. Bottom end units in METROPLACE tower are 491 sq ft and 500 sq ft, with one open room shared as a kitchenette and living room. Townhouses at the base, are another matter. How about putting in one less unit per floor, and giving people some leg room?

Metrotown  Burnaby - Micro condosMETROPLACE Type B - 491 sq ft "All starting from the $250's". Well.... yeah, there will be a dozen of these given away, if only to make the advertising legal. But for most bottom end units, teensy weensy units you can expect to pay a cool $300K when you've covered everything, including your lawyer and other incidentals.

What do super towers like SOVEREIGN and METROPLACE do for us in Metrotown, besides shooting holes in the sky? They offer us fewer chips in the bag, while boasting of the flavour.

Lowny's = Montreal  5 Cent Cherry Blossoms

I call it the "Cherry Blossom Syndrome". Few immigrants know it, but Canada once used Imperial measurement, as the Americans still do. One of the economic "legacies" of the Trudeau Era was the imposition of the metric system. Canadian children suffered the metric conversion even more than adults, because it allowed the greedy businessman to victimize us. Candy, potato chip and pop makers were very quick to reduce our favorite treats to much smaller sizes (offered in grams) but not one reduced their sell price. My weekly sugar fix was the Lowney Cherry Blossom, a delicious mound of chocolate with a whole cherry in its centre. The metric Cherry Blossom was a pitiful thing, and I never bought another one. With real estate being what it is, an added advantage to current runaway prices is, the kids won't notice you made the candy smaller.

Lowny's CHERRY BLOSSOM - 5 cent boxTen years ago 700 - 730 square foot units were the average sized, one bedroom condos being sold in Metrotown. I do fear the arrival of these 490 -500 sq ft units at SOVEREIGN and METROPLACE are establishing a benchmark low, which will persist. We'll soon see, as new designs for shorter towers will be approved over the next 36 months. This morning I had a look at measurements for the MONARCH, a popular condo tower on Hazel Street. BOSA built it, and it has one of the best reputations in Metrotown. For one thing, it's not a "leaker". The MONARCH was built in 1999 and its one bedroom units averaged 712 -722 square feet. A one bedroom and den usually measured 769 square feet ("All measurements subject to Buyer verification.") The point is, the shaving down of unit size is just a significant factor in repulsing local Buyers as the sky high prices fueled by offshore money. Chinese VIP customers brought in on purchasing junkets may not care, but the rest of us have to. If you are at all curious about Price History to go with the MONARCH floor measurements, you can have a look. [MLS Search result]

I suppose we can consider another time, what government-imposed costs (GICs) are doing to drive up local condo prices. That's also a scary subject. Now on the lighter side...

Metrotown Burnaby, Flight Simulator X Here we see Metrotown, Burnaby as depicted in Microsoft's Flight Simulator X. That is Deer Lake down slope, (the redeveloped site of the former Oakalla Prison), and the runway shaped Burnaby Lake in the distance.

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