Developer drops the price of pre-purchased condos
Published Wednesday, March 18, 2009 2:37PM PDT
Many people who bought a pre-sale condo last year now wish they hadn't.
The housing market has plummeted, and many buyers are locked into a unit that will be worth less when the building is complete.
But one developer in Yaletown is giving buyers a surprising break.
Amacon has dropped between $100,000 and $250,000 off of the price of their condos, and passing those savings along to existing pre-sale buyers.
"Amacon is taking some unprecedented steps in the real estate industry today," said Cam McNeil, founder of Mac Marketing Solutions, the firm in charge of promoting the new building.
Construction is set to begin on The Beasley, a large development in Yaletown--one of Vancouver's most expensive neighborhoods. But construction costs are less than Amacon expected, according to Amacon vice president Bob Cabral.
"We were in a position to benefit from construction costs that have been reducing in the last 10 or 12 months," said Cabral.
"We think the appropriate thing to do is pass that on to all buyers and not distinguished between people who pre-purchased nine months ago or pre-purchased today," he added.
But according to the director of the Sauder School of Business, Tsur Somerville, "Amacon is not doing this out of the goodness of their heart."
The developer may have learned its lesson from The Morgan building in Surrey, said Somerville.
Seven pre-sale buyers walked away when the housing market plummeted, now the two sides are in court.
"What they're saying is its much better to give up the money down and lock these people in on a much stricter contract to make sure they come through and take these units," said Somerville.
But whether it's good will or good business, buyers are happy to be saving a bundle.
Local radio host Bro' Jake Edwards bought two condos at The Beasley last year for half-a-million dollars each.
"I bought them for my kids," Edwards said. "All of a sudden this came up and I'm saving, on both units combined, 350 grand."
The rest of the units will be released for sale in a few weeks.
This is a savvy move, says Somerville.
"Now they're everybody's buddy," he said.
After all, Real Estate is all about timing.