The First Nail in the Coffin

The massive Infinity Condominium project in Surrey is now in receivership. Construction was halted in August. On October 8, the receiver padlocked the doors.

Hundreds of buyers, maybe as many as 500 are impacted. The project was supposed to be three or more towers, however only one has been built.

The developer is from South Korea and is facing financing problems at both the individual project level as well as at the holding company level.

Buyers who have placed deposits have their deposits protected, but only the value of the deposit not the promise of a condominium. So someone who placed a $40,000 deposit on a $250,000 condo, has their deposit protected BUT, some people placed deposits as much as 2 1/2 years ago, and the $250,000 condo now costs $400,000, so they could have their deposit returned but no longer afford to be able to buy anything.

The same developer is responsible for the Sky project, also in Surrey. We already know that financing for the Sky project has been pulled, and we predict Sky to go into receivership in a few days.

These two projects were pre-sold 2 or more years ago. There are many more projects pre-sold much more recently, many of these will also be restructured, and with these projects people will be best advised to walk away from their deposits, rather than wait 4-5 years to get potential completion of a condo they purchased for $500,000 but is only worth $250,000.

BTW, the Canadian Real Estate Board (CREB), based in Ottawa, reported yesterday that Greater Vancouver housing sales were down 43.2% in September from a year earlier, while the average sale price dropped 8% to $535,598 over the last year.