The Vancouver developer behind the stalled Sophia condominium complex says people with pre-sale agreements will likely still make a profit on the project, once it finds a new backer to go ahead.

Developer Bill Eden walked away from the project near Main and 11th in East Vancouver last week after it was 85 per cent complete, saying it was not feasible to finish the project because of rising labour and construction costs.

Vancouver real estate developer Bill Eden says pre-contract owners for the Sophia will likely come out ahead.
(CBC)

Holders of 81 pre-sale contracts were left wondering if they will ever get their homes. The Bowra Group, which has taken over the project, has 21 days to submit a plan to the courts to revive the development, or find another developer to take it over.

Eden is hopeful that whoever ends up completing the project will honour the pre-sale agreements.

But he estimates that the holders of the pre-sale contract will have to pay a 10- to 15-per-cent bump in the prices to hold on to their contracts.

The Sophia in Vancouver's Mount Pleasant neighbourhood is 85 per cent complete.
(CBC)

Still, with the steady rise in the value of Vancouver real estate, that should mean who bought when the project first went on sale three years ago will come out ahead, said Eden.

"The appraised value of this building has gone up from $30 million to $40 million so there's a $10 million lift in this building over a three-year period," Eden told the CBC's Rick Cluff on Wednesday morning.

"The purchasers have made up to $200,000 and more on their units, so they're not hurting," he said.

When asked about buyers left scrambling to find a home because of construction delays, Eden said he believed most buyers were actually real estate speculators who would not need the homes to live in, and who know pre-sale agreements are always a risk.

The executive director of the Condominium Home Owner's Association, Tony Gioventu, agrees that buying pre-sale condos is a game of speculation.

But he says there are people who buy them who aren't in it for the investment and don't realize the risk.

"Normally, only between five to 30 per cent of pre-sale buyers plan to live in the condo once it's built, estimated Gioventu, "but those who aren't in it for the investment need to protect themselves."

"You have a seven-day cooling off period under the statute. Take your contract — the minute you have it, it's a must — take it to a lawyer who's experienced with real estate, who's experienced with presales contracts. And then assess the risks," advised Gioventu.
 
Last fall, Eden cancelled two other condominium projects — the 119-unit Elyse at East 7th Avenue and Scotia Street and the $30-million, 31-unit Montgomery Estates townhouse project at Oak Street and 43rd Avenue, citing rising construction costs as the main factor.