The hottest ticket in Vancouver this week was not for a concert or a play, but a lunch hosted by the Urban Development Institute. And they call this place No Fun City.
The guest speaker was local condo merchant Bob Rennie, whose take on the city's unrelenting real-estate market is considered by many to be as reliable as government bonds. The event was sold out weeks ago.
To call Mr. Rennie a condo seller doesn't quite do him justice. In the past 10 years or so his company - Rennie Marketing Systems - has sold more than 10,000 units. Last year, sales totalled $1.5-billion. Not bad for a kid who grew up without much on the city's east side - long before homes there became million-dollar lottery tickets.
The 51-year-old's success has helped him put together a much-prized personal art collection, buy a gold Bentley coupe and purchase the zillion-dollar home he lives in.
Mr. Rennie is constantly evaluating and judging the market, betting on where it is - and isn't - going. For the past decade, that's been pretty easy. The sales-and-price trend in Vancouver has graphed in pretty much one direction: up. But many in Mr. Rennie's audience this week were anticipating he'd be forced to deviate from his usual cheery script.
In fact, hours before he rose to speak, media outlets were reporting private-sector forecasts that showed the Canadian housing market cooling. Scotiabank warned that price gains from housing would ease in 2008 and slow down further in 2009.
If there is a slowdown under way, Vancouver seems to be immune from it. At least, if we're to believe the mind-boggling numbers provided by Mr. Rennie.
Consider this: Of the 2,743 condominiums expected to be finished this year, nearly 90 per cent are already sold. There are 2,925 condos scheduled to be completed in 2009; 98 per cent of those are sold. And 83 per cent of the 714 that will be finished in 2010 are gone.
Many of the condominiums are attached to luxury hotel developments. Mr. Rennie is selling 123 units at the Ritz-Carlton, which is scheduled to be completed by 2011. Actually, he's already sold 60 per cent of them at an average of $2,300 a square foot. That's right, a 1,000-square-foot condo in downtown Vancouver that you can't get into until 2011 will cost you $2.3-million.
Mr. Rennie said he used to joke that the per-square-foot cost of a condo in the city would be 2010 by 2010. Well, 2010 a square foot has come and gone.
The Ritz is asking $29-million for its penthouse suite, by the way. The one in the Residences at the Hotel Georgia sold recently for $18-million. And Mr. Rennie just unloaded the penthouse at the Shangri La, which isn't even completed yet, for $16-million. Three years ago, that same penthouse, not yet built and 1,000 square feet smaller, was on the market for $5.3-million.
Can you believe these numbers?
Who's buying up all the condos in the city? Well, a good percentage of the purchasers, as it turns out, are offshore investors, people making scads of money in China and Korea, Iran and Europe. And now, according to Mr. Rennie, Russia's nouveaux riches are moving into the market in a big way.
Personally, I don't get it. There are other cities in North America that have far more going for them than Vancouver but have not witnessed nearly the same run on their real estate. Chicago is one that comes to mind.
In Vancouver's case, the old real-estate adage - location, location, location - seems to be true. The value of the city's land and housing seems to be mostly about where the old town is situated.
Yes, you can live an outdoorsy lifestyle here. And there are some great restaurants. But let's face it, much of the architecture is third rate and the city is bereft of the kind of cultural institutions that define great cities; that define the world-class city Mr. Rennie believes Vancouver is.
I don't see it. Not yet.
Now, having foreign investors gobbling up the condo market isn't all bad. Many have no interest in living in the units they own. They probably don't even know what they look like. So they rent them out to people who effectively pay the owner's mortgage, which is how the rich get richer. But the investor condo has become an important supply of rental housing in the city, which is dwindling at an alarming rate.
Who knows where this is all heading. Listen to Mr. Rennie and there appears to be no end in sight to the fantastic escalation in real-estate prices here. He may be right. In Paris, real estate is now so expensive investors are buying 1/11th of an apartment, according to a story in yesterday's New York Times.
Anyone want to go in on a condo with me?