What would happen if the Canadian real estate market followed a similar path to the U.S. housing market, and what would that look like a year down the road?

The Financial Post answered that question in an article titled, “How low can they go? If Canadian prices follow U.S. trends, certain cities will experience a major slide in house prices.”

Using a calculation based on the rise and fall of U.S. housing prices, and applying those same numbers to prices in Canada the Financial Post determined it would “…mean that most Canadian cities are headed for a fall in housing prices, especially those out west.”

Using their formula, the average price of a Saskatoon home would fall to just shy of $170,000 by October 2009 from it’s peak of $310,386 in June of 2008.

Is this method of comparing markets reasonable, or is it more like asking, “What would happen if we all suffered from cancer symptoms?”

You decide, and please let me know what you think.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher Royal LePage Vidorra

RBC’s recently released “Housing Trends and Affordability” study suggests that housing affordability in the province saw some modest improvements over the third quarter but the Saskatchewan housing market is experiencing a “hangover” after a year of partying hard.

“Like Alberta and British Columbia before it, Saskatchewan is about to feel the downside of frenzied markets. Housing demand in the province greatly benefited from the red-hot prairie economy (thanks largely to strong demand and prices for commodities) and the inflow of people into the province. However, housing markets got carried away as skyrocketing prices significantly overstepped historical relationships with household income. RBC’s provincial affordability measures spiked in all housing segments last year, reaching the poorest levels on records dating back to the mid-1980s. As is often the case, a wild party ends with a hangover and Saskatchewan’s fête last year will be no different. Housing resales and prices are already showing clear signs of weakening. More is likely to occur.”

Take two Tylenol and call me in the morning.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher Royal LePage Vidorra

Tenants of Saskatoon’s Milroy Apartments learned Thursday of their lost court challenge aimed at stopping the condo conversion project at their building, which was approved by Saskatoon city council on January 14, 2008.

“The decision was that the court is not interfering with city council’s decision. The application to set aside the decision approving the condominium plan was denied,” said Andrew Mason, lawyer for the Milroy tenants. Mason presented his case before Court of Queen’s Bench Justice Mona Dovell on March 12 arguing that council did not correctly interpret or apply provisions in the provincial Condominium Property Act which gives municipalities discretionary wiggle room to deny applications based on low rental vacancy rates. The latest Rental Market Report released in December by Canada Mortgage and Housing Corporation pegged the vacancy rate in the area at just 1%, and at .6% across the city of Saskatoon.

The Milroy Apartment tenants will now have to decide if they are willing to bear additional costs, which would have to be incurred if they choose to appeal the court’s ruling.

The City of Saskatoon has agreed to undertake a review of its condominium conversion policies and city administrators have already brought a proposal of potential changes forward. The administration will present the court decision to the city’s executive committee on March 31, and according to city solicitor Theresa Dust, a policy debate will likely ensue at the committee’s April 14 meeting.

Read the story from today’s Star Phoenix here.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

Tenants of Saskatoon’s Milroy Apartments asked Justice Mona Dovell to overturn the City of Saskatoon’s decision to approve an application to convert the apartments to condos on Tuesday.

Andrew Mason, the lawyer representing the group of tenants who are opposing the decision argued that city council either misinterpreted the provincial legislation that governs condominium conversions, or ignored it.

Bill Davern, legal council for the City of Saskatoon maintained that council has jurisdiction to make the decision without interference from the courts, that they “fairly considered” all factors which the law requires them to consider, and that the decision to grant the application was “not unreasonable.”

Davern told Justice Dovell that 21 additional applications for conversion projects are waiting for approval and that if she decides that the courts should have the final say in this instance that it would open the door to future actions.

“I don’t know whether the court, with all due respect, is properly equipped to do that.”

Justice Dovell reserved her decision and promised to deliver a judgment as soon as possible.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

You’ve got to know that Saskatoon community services manager, Paul Gauthier is having some long days at work. He’s one of the civic officials responsible for processing condominium conversion applications. That can’t be a real funfest right now. In fact, approving condo conversion applications has become so controversial that Gauthier has simply had enough, and he has elected to invoke a clause in the current policy which allows him to toss the political hot potato to city council for review of all existing and future applications.

If you think it’s a hot debate now, rest assured that things are about to heat up.

Council passed a motion on Monday, which essentially puts 21 existing apartment building conversion applications in limbo. Gauthier advised council that a new report would be completed for its March 17 meeting, outlining the current situation and possible policy changes which could be used to regulate condo conversions. Another report, recently brought forward by city administrators was tabled for later discussion following a court date on March 11 when tenants of Saskatoon’s Milroy Apartments will argue against the certificate of approval which was issued on that property. Mean time, no conversion certificates will be granted and those which are already in the hopper would be dealt with in accordance with any new policy council might choose to adopt.

Dealing with a steady flow of angry tenants and concerned citizens can’t be easy. I’m guessing that we’ll have some pretty vocal investors on our hands as we move forward from here. Tens of millions of dollars have been invested and those investments were made with an end goal in mind; conversion and resale.

It’s easy to see valid points on either side of the argument. Displaced tenants have few options and promising them that “the market” will eventually work its magic is of little comfort when you don’t know where you’ll be living in thirty days. Free market proponents will argue that there are major benefits to be realized through conversions. Preventing these units from reaching the resale market limits supply in an already stressed market and puts further pressure on prices. Ultimately, that hurts the rental market as well. It’s a real catch 22.

The complexity of the issue can’t be overstated. At the end of the day, the math is fairly simple. Demand exceeds supply in both the rental and the resale market. We need more property in both arenas if we’re going to see any relief. Development of new rental property is the only solution that serves everyone and it needs to happen fast. Free land anyone? I suspect the city may be open to your proposal.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

In spite of the fact that approval has been obtained and the Kelsey Apartments have been separately titled, the building’s owner, Victory Majors Investment Co. has decided to abandon its plans to sell the units off. Kay Nasser, founder of the company has announced that they will hold onto all 77 units and rent them out.

The original plan was to create “luxury condo units,” but skyrocketing construction costs got in the way. Nasser told Star Phoenix business editor, Murray Lyons, “The market wasn’t there and we couldn’t get people to do the work. It was getting prohibitively expensive.”

The Kelsey has been renamed, the “Phoenix” and the property manager will begin showing the vacant 1, 2 and 3-bedroom apartments to prospective renters this weekend.

Given the extremely low vacancy rates for apartments in Saskatoon, I think we can see this as a pretty positive story. Does it finally make more sense for owners to hold and rent the apartments that they own? Could this be the first sign of a turn around that works in favour of local renters? Only time will tell, but in the mean time, 77 new apartment vacancies certainly can’t hurt.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

When the City asked for developers to consider an exciting new “Urban Village” concept at River Landing in Saskatoon's Central Business District, the call was answered by Michael Lobsinger, a former Saskatoon resident and now a successful real estate developer.

On Wednesday, March 12, Mr. Michael E. Lobsinger, President CEO, Lake Placid Group, will speak to the Saskatoon business community at the 14^th Annual Traders Luncheon in support of Junior Achievement of Saskatchewan. He will discuss the challenges and rewards in building in Canada’s hottest markets – Calgary and Saskatoon.

Lunch begins at 12:00 PM at the Sheraton Cavalier in Saskatoon with the speech beginning at 12:30 PM.

Flyer with additional event details.

Ticket order form.

Thanks to Darren Hill, President and CEO of Junior Achievement of Saskatchewan for the heads up on this event.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

It seems that Saskatoon has one of the most generous condo conversion policies, if you’re a landlord that is.

Saskatoon city administrators are working hard to bring about a policy change in the city of Saskatoon. They’ve recommended a number of changes that they say would protect tenants from being displaced at times when vacancy rates are exceptionally low.

Their research had them comparing the policies which exist in other Canadian municipalities that have experienced real estate booms in recent years and they found that in most areas it’s quite a bit tougher to convert apartments to condos when rental conditions are tight. Vancouver, Victoria, Ottawa, and Kelowna all prohibit conversions when vacancies fall below a minimum threshold which ranges from 2-4%. No such policy exists in Saskatoon.

The executive committee responsible for reviewing recommendations brought forward by city administrators has tabled discussion on the suggested policy changes until after a March 11 court challenge initiated by tenants of Saskatoon’s Milroy Apartments which was recently approved for conversion.

Read the Star Phoenix coverage here.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

Saskatoon’s landmark hotel, the Delta Bessborough is now under new ownership. The British Columbia Investment Corporation (bcIMC) took ownership of the historic hotel on February 1 but just announced the acquisition recently.

The new owners took a pass on disclosing the purchase price but did indicate that they plan on investing an additional million dollars in “upgrades” to be completed this year.

The Bessborough Hotel was built between 1928 and 1932 by the Canadian National Railway. A severely depressed economy delayed the hotel’s opening until late in 1935 when its first guest was welcomed. The Baltzan family acquired the hotel in 1972 and eventually passed control to Canadian Pacific Hotels in the 1980’s. It was purchased by the Legacy Hotels Real Estate Investment Trust in 1998 and a $9,000,000 restoration project, intended to reclaim many of the hotel’s historical features was undertaken in 1999. The 225 room four star hotel graces the west bank of the South Saskatchewan River in downtown Saskatoon.

bcIMC manages a pension fund which finances retirement benefits of some public employees in British Columbia including health-care workers, firefighters and teachers. They also own the Radisson Hotel and the Saskatoon Inn. With all three hotels in their portfolio they’ve got quite a handle on the upper end market in Saskatoon.

Any guesses on the price tag of this magnificent piece of Saskatoon?

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

Saskatoon city council’s executive committee will consider proposed changes to our condo conversion policy at its February 25^th meeting. The proposal, brought forward by city administrators recommends a number of changes which they say would be helpful in keeping a supply of rental units available in the city.

Administrators have suggested that the city refuse applications to convert apartments to condominiums when Saskatoon vacancy rates drop below 1.5%. They further suggest that investors should pay a fee of $10,000 per unit when vacancy rates are between 1.5% and 3%.Finally, administrators would like to see conversions involving more than 50 living units actually go to city council for review. Currently, only those projects involving 100 or more living units require approval of council.

“While your administration remains of the view that condominium conversions have an overall positive impact on the community during normal market conditions, the drop in vacancy rates does raise the question as to whether the City of Saskatoon should continue to approve condominium conversion applications in the foreseeable future,” the report says.

Saskatoon developer Ken Achs, president of Midwest Development Corporation argued in a letter to council opposing the proposed changes that people may be overlooking the benefits of condo conversions, which include needed upgrades, which improve safety and quality of life for residents. He also notes that typically 30% of converted units are returned to the rental pool in an improved state.

“If there were suitable tax incentives and lower-priced land, more apartments would be built and the market would self-regulate through supply and demand,” says Achs in his letter.

The city received 54 applications to convert a total of 1,544 rental units to condominiums during 2007. That’s more units than were converted over the previous ten years combined. Saskatoon rental vacancy rates plummeted from 3% in the first quarter of 2007, to .6% by the third quarter. Rents saw significant increases over a short period of time while tenants, displaced by ongoing conversions scrambled to find a new place to live.

Read the story in today’s Star Phoenix here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email. Norm Fisher Royal LePage Vidorra