June 23rd, 2024

Lot sales in the Hat due for a boost, developers hope

By COLLIN GALLANT on June 7, 2024.

Lots in Hamptons Phase 3A could be ready for sale in late August, the developer has told the News.--News Photo Collin Gallant

cgallant@medicinehatnews.com@CollinGallant

Medicine Hat’s land developers are expecting an uptick in lot sales this year as market conditions improve, but aren’t expecting a breakout after extremely low activity in 2023.

This week the Bank of Canada lowered its overnight lending rate by 0.25 points in the first move away from raising rates to combat higher inflation over two years.

Meanwhile, local real estate prices have soared, which would theoretically boost the new home market but construction inflation and worries about borrowing costs kept a lid on the sector.

That hasn’t stopped the City of Medicine Hat’s land department from aggressively marketing its remaining single-family lots in Saamis Phase 7, or the private sector looking to add new phases, notably in the Hamptons.

“There are still inflationary pressures that builders and buyers are facing,” said Randi Bruckner, manager of real estate with the city’s land department.

Her office took back about 56 lots this year after the end of an agreement with Lansdowne Equity Ventures to market the community near South Ridge that had been a tough sell since opening eight years ago.

“It’s an opportunity to market those and sell them – they’re available for those looking for a smaller footprint of a home or some attached housing,” said Bruckner. “Since the start of the year, we’ve sold eight lots, which is a real positive for the area and finishing it off.”

Lots there range from $80,000 to $146,000 in price, providing an alternative to larger, more expensive lots in privately developed communities like the Hamptons, or Coulee Ridge, though mid-sized lots there are now open.

As for Saamis, in late 2020, the city agreed to sell the remaining 96 lots in the subdivision to Hamptons owner Lansdowne Equity Ventures in a deal structured to transfer blocks of remaining lots until land was sold out.

That agreement was exited in 2023, with Lansdowne moving focus to developing a new phase of larger lots in the Hamptons’ Phases 3A and 3B, at the corner of 13th Avenue SE and S. Boundary Road.

That also allows Lansdowne to focus on projects elsewhere in Alberta, and on its larger-lot community in Medicine Hat, the Hamptons, where early phases are nearly sold out.

A first phase of 35 new lots could be finalized and ready for possession in August.

“It’s a natural progression to do Phase 3, but we don’t anticipate a very high (rate of sales early on),” said manager of development Steve Seroya. “The subdivision is very nice and targets a specific demographic.”

Garry Ruff is a realtor and the president of BILD Medicine Hat, representing home construction industry, who feels a larger interest cut in July could break up the apparent gridlock.

“Everyone is still being very careful,” said Ruff of both new home buyers and builders, adding the market could take time to respond. “The price of a new build is still very expensive compared to an existing home.”

Average home sales rose 14 per cent in the first quarter of 2024, and sat at $374,000 in April.

The average new home permit in 2023 estimated a budget of $423,500, not including finishes or land cost.

According to building permit data from 2023, only 29 for new single-family homes were let last year, down from 38 in 2022.

Five permits in April brings the new home total to eight, one third through the year.

Beyond Saamis, the city’s remaining new land inventory includes duplex sites in Southlands and a limited amount of residential land in existing portions of Ranchlands.

She said they will use this year’s results and end-of-year inventory to determine priority projects to develop new lots in the 2025-26 time frame. A new operating and capital plan is due for council approval at the end of this year.

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