Vancouver Luxury Real Estate Feeling the Pinch

Despite the fact that the Canadian luxury real estate market was considered by many locals to be immune from the financial crisis, things have changed dramatically over the last few months.

CTV news reports that a $500 million luxury hotel and condominium project in Vancouver’s downtown area has been canceled. According to the report, the credit crunch and economic downturn are wreaking havoc in Vancouver’s real estate market where sales are on a steep slide and prices are falling.

“Vancouver’s market is already crashing, it’s no longer a question,” said Brian Ripley, CEO of consulting group Oakes Ripley & Associates Inc.

Of course, the lawsuits are starting to fly, as investors, no longer able to finance up-coming purchases attempt to extricate themselves from agreements. Riaz Kassam, a speculator in the Vancouver luxury condo market placed an $80,000 deposit on a $1.5 million penthouse in the tony H&H Yaletown building. Unable to sell the apartment he planned to use as a down payment, he is now faced with forfeiting the deposit.

H&H Yaletown have now sent out several warning letters to buyers who are pulling out of purchases. Another developer, the Onni Group, is actively suing at least 20 purchasers of its Aria 2 development in Port Moody for backing out of their pre-sale agreements. Real estate developer Amacon is suing seven purchasers of its Morgan Heights development in Surrey for the same. Condo fire sales are raging—the Onni group has been taking out full-page ads in the local papers trumpeting “Vancouver’s largest real estate liquidation event”—and John White, a Vancouver lawyer representing several retreating buyers, says he now gets about “two or three calls a day” from people who have issues with their contracts. More details.