Residential developers have been feeling the pinch associated with the sliding price of oil.
Essex Developments, Solid Rock Developments and Trimount Developments have all purchased land from the City of Estevan in recent years to develop residential subdivisions. And while all three are forging ahead with plans, they say the price of oil has slowed interest in their projects.
For Essex Developments, it appears their Meadows subdivision in northwest Estevan will finally be proceeding after several years of delays, hurdles and speculation about the future of the project. The massive subdivision calls for hundreds of low-density and medium-density building units to be constructed.
When Estevan was in the midst of its housing shortage, which has only started to ease in the last 18 months, the Meadows was viewed as a critical part of the solution.
But Essex will be easing into the project.
Graham Cripps, a consultant with Essex, told the Mercury a lot of things have been happening with the City of Estevan to allow the project to proceed.
“The client is anticipating approval, and we'll be grading the first 25 lots in the next month,” said Cripps, who added those 25 lots would be located along Wellock Road.
The economic slowdown has created challenges, he said. If they get something listed, they don't know how the market is going to react. And they’re concerned with the potential impact of the other single-family residential subdivisions currently under construction in Estevan.
Essex still plans to eventually proceed with the entire subdivision.
Cripps noted city manager Amber Smale has been great to work with, especially compared to her predecessor, Jim Puffalt.
“She's pro-active, and she wants to get to the solutions of any of the problems, and has been working with us closely,” said Cripps.
Solid Rock purchased the rights to develop Phase 9 of the Trojan subdivision from the city of Estevan, and started selling lots in 2013. The first component includes 37 single-family residential lots. Thirteen lots have been purchased, and 24 are still available.
In the Matchett Bay bulb at the east end of the development, there are seven starts among the 11 lots. Some of the houses on Matchett Bay are finished.
“There are five families that have taken possession and are living in their houses,” Solid Rock partner Ben Gustafson told the Mercury.
On Sillers Street, there are two houses that are finished and for sale, and two more are nearing completion.
“On the south end of Sillers Street, we are talking to a couple of different groups about registering a … neighbourhood association, and what that entails is you would have … title to your own lot and title to your own home, so it would be a detached single-family home,” said Gustafson.
Property owners would be part of a strata association, so they would pay for such tasks as yard maintenance and snow removal.
It's a new concept for Estevan, he said, but it's been employed in Phoenix and other cities, and he expects it will catch on with people who aren’t interested in doing their own yard work.
The downturn in the economy has affected their plans to start Phase 2, which would include 26 more single-family lots, and a 3 1/2-acre parcel of land reserved for medium-density condominium developments.
“There would be no immediate plans to do that right now,” said Gustafson.
He believes now is the best opportunity to consider building a home, thanks to the low interest rates for mortgages, and the availability of contractors.
Trimount Developments president Jason Fleury said they have seen a slowdown in sales in the last two quarters, particularly with their North Point Condominium development. Seventeen of the 39 condominiums are still available.
“We're actually changing a bit of our strategy,” said Fleury. “We're selling and now starting to rent out some units just to get them occupied and create a little bit of revenue.”
Townhouse sales have been relatively steady, as they have sold 10 units in the last two months for the development adjacent to the new Padwick Park. The rest of their residences, outside of the condominiums and townhouses, are sold out.
“We're just continuing with the Parkview Townhouse project at this time,” said Fleury.
The condominiums and townhouses are part of Trimount’s third phase in Dominion Heights. The project includes 36 single family homes, 32 townhouses, 90 condominium units and 16 duplex units.
Phase 4 is currently being evaluated due to the state of the economy. Fleury said they’re discussing whether this is the best time to put additional properties on the market.
“We were scheduled to go this year, but that's been put on hold,” said Fleury.
He doesn't know what will happen with Phase 4, thanks in part to the number of other single-family developments in the city already underway. Phase 4 is all single-family projects – the type of housing that Fleury said has been very successful for Trimount in the first two phases in Dominion Heights. Once some of the lots are purchased, then Trimount will decide whether it makes sense to move forward.
“I think there is steady interest out there,” said Fleury. “It's just that people right now are uncertain about their jobs. Buying a home is a large purchase; one of the largest purchases you make. And so they're just a little more cautious in light of oil being around $40 per barrel, and not knowing whether they're going to be in employment.”
Phase 3 of the Royal Heights subdivision is also showing progress. The City of Estevan is responsible for selling the lots. It’s the final subdivision the city will be taking care of, as future developments are to be sold to private developers.
Land development services manager Rob Denys said two houses are under construction, and a third lot has been sold. There are 21 lots in Phase 3 for Royal Heights, which is being constructed north of St. Joseph’s Hospital.