4 Nov 2014
The StarPhoenix
Developer warns housing has cooled
The City of Saskatoon is planning to service land for 16,688 new houses and multiunit dwellings over the next three years to keep pace with four per cent growth.
A local developer, however, cautions that the housing market has cooled and unsold inventory is already high.
According to a report on land development presented at city council’s finance committee meeting on Monday, builder and developer inventory hit 1,783 for single-family homes as of Aug. 15 — well above the target of 1,195 — and 3,492 for apartment, condo and townhouse units — drastically more than the target of 2,490.
Saskatoon population growth scenarios
The single-family inventory marks a high for the last five years and the multifamily inventory is the highest since 2010. Still, the city plans to accommodate growth in Saskatoon’s suburbs by servicing 5,106 more units in 2015, 3,763 in 2016 and 4,483 in 2017. “I would say it’s a bit of overkill,” said Ron Olson, general manager of Boychuk Homes and past president of the Canadian Home Builders Association.
“We’re not suggesting that it’s critical, but anybody in the industry knows there is an oversupply of vacant lots and completed houses.”
The report charts possible growth rate scenarios over the next three years: Four per cent growth would mean Saskatoon’s population would balloon to more than 290,000 by 2017, while a more modest 1.5 per cent growth rate would result in significantly less than 270,000 people.
Olson stressed he’s not overly critical of the city’s approach, but pointed out there are fewer buyers out there, especially in the $500,000 to $650,000 price range.
“We’re just being cautious right now on the private side,” he said in an interview.
As of Jan. 1, most of the inventory of 1,394 singlefamily lots were located in Stonebridge (510), Evergreen (438), Rosewood (257) and Hampton Village (107).
Frank Long, the director of Saskatoon’s land branch, said the city got caught with an inventory that was barely sufficient to keep ahead of demand several years ago and wants to make sure enough serviced land is available.
“I think what we’ve got now is a better balanced inventory than what we had three or four years ago,” Long said.
Coun. Charlie Clark expressed concern that suburban development shows the city has made little progress toward improving its growth ratio from 80 per cent in the suburbs and 20 per cent in the core to the stated goal of 70-30.
“This report shows a massive amount of greenfield development,” Clark said.
Ryan Walker, a professor of urban planning at the University of Saskatchewan, said city officials talk about the need for sustainable growth, but since — unlike most municipalities — the city is also a land developer, there is an “addiction” to the money from suburban growth.
“The great contradiction is that over time it’s actually more costly to the people of Saskatoon to pay for that outward expansion,” Walker said in an interview. “City hall talks out of both sides of its mouth.”
Coun. Tiffany Paulsen called for changes in the way the city reports on suburban growth, pointing out the impact of growth on the mill rate is not revealed in reports like the one presented Monday.
Of the 16,688 serviced units planned, 8,960 would be multi-family units like apartments, condos and townhouses. The report also says developers plan to service 430 acres of industrial land over the next three years, most of it in the Marquis Industrial area, and more than 295 acres of commercial land.

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on November 4, 2014, in Uncategorized and tagged . Bookmark the permalink. Leave a comment.

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