As reported in the Regina Leader-Post, Ron Olson has spent more than four decades building homes in and around Saskatoon, long enough to have seen a few booms and busts in the city’s construction industry.

His company, Saskatoon-based Boychuk Construction Corp., is among the city’s oldest builders and land developers, and has put up an estimated 7,000 homes in the area.

But the most recent downturn, which has forced builders to cut staff amid flagging demand for new homes, is unique, Olson said Tuesday in an interview.

“It’s so sudden and so fast. I mean, we dropped within less than 18 months or so from a fairly normal market down to starts that are representing 12-year lows in the city.”

Olson said his company, which employs around 15 people, has not had to lay anyone off, but work for subcontractors and tradespeople has essentially dried up over the last year.

“We have long-term builders who can weather these kinds of downturns, but there’s certainly many builders who, if it continues, are going to have a very hard time staying in business.”

Earlier this month, the City of Saskatoon reported a dramatic decline in the number of new building permits issued in 2018, — 1,180 compared to the peak 3,000 issued in 2012.

Apartment buildings and townhouses experienced the sharpest year-over-year decline, falling 49 per cent, while single-family houses slid 25 per cent and duplexes 19 per cent.

The Saskatoon and Region Home Builders’ Association (SRHBA) paints a similarly bleak picture, noting that new home sales dropped between 11 and 30 per cent, depending on type, last year.

Olson and SRHBA CEO Chris Guerette attributed the slump to weak commodity prices, as well as the application of provincial sales taxes on construction contracts and Ottawa’s new mortgage stress test.

The provincial government, which has signalled that it has no intention of reinstating the PST exemptions, estimates the tax has increased the cost of construction projects by just under three per cent.

Keep reading in the Regina Leader-Post

 

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