Recently, a single supplier to the oil industry bought up 10 condos on the Saskatchewan side of this border town to ensure housing for new hires.
The new three-bedroom townhome-style units sold for around $250,000 each and will likely rent for at least $1,700 a month, according to Fred Falkner, a partner in Century 21 Real Estate.
According to Falkner, realtors are now seeing multiple offers on well-priced property. So far this year, sales through MLS are up about 11 per cent from a year earlier.
Even the record-setting construction of new homes has been challenged to keep up with population growth in Lloydminster, which has soared by 32 per cent in the past decade to around 27,000. When a gated subdivision of 73 lots came to the market this year, two local home builders snapped up 25 of them within two days.
Yet, a search of the local MLS listings finds that investors can find older detached houses for under $200,000 and condominiums in the $169,000 range, with the least-expensive homes on the Saskatchewan side of the border.
Bordering a boom
While there are many reasons for Lloydminster's economic success, its geographical location right on the Alberta-Saskatchewan borderline doesn't hurt.
"It is the best of both worlds," said Falkner, noting that the two provinces are leading the entire country in economic growth. For example, according to Statistics Canada, average weekly earnings in Saskatchewan jumped 5.4 per cent this year - the second-highest in the country - to $897.50. Saskatchewan has had average weekly earnings above the national average every month since August 2011.
One city Saskatchewan is also the world's largest producer of potash and produces 10 per cent of the world's wheat. This year, the province is seeing record prices for its resources. Wheat values are soaring, for instance, because of drought-like conditions in the U.S.
Alberta, of course, is Canada's leading economic engine and is drawing young job seekers from across Canada.
Lloydminster is incorporated as a single city with a single municipal administration that seems to tap the best aspects of both provinces.
Traditionally, more city residents - about 60 per cent - live on the Alberta side of the border, but this may be changing, especially for younger people.
The Saskatchewan side offers lower automobile insurance for young drivers and lower house prices than the Alberta side. In the past five years, the population rose 20.4 per cent on the Saskatchewan side, compared to 13.3 per cent on the Alberta side.
Lloydminster has no business tax, and the city is also exempt from the Saskatchewan provincial sales tax, since Alberta has no sales tax.
Both sides of Lloydminster are experiencing a development boom. Last year construction values hit a record of $180.4 million, a 38 per cent increase from a year earlier. In just three years, the city has seen a near-75 per cent increase in construction permits, perhaps unique in Canada.
Husky expansion
Key development news this year includes the opening of the new 105,000-square-foot heavy oil headquarters and data centre by Calgary-based Husky Energy, the city's largest employer.
Husky holds about two million acres of land in Lloydminster area and operates a heavy oil refinery a heavy oil upgrader and two thermal projects and employs more than 900 people.
The new Husky Place is designed to house about 375 workers.
"Husky Place is a symbol of the long-term investments we've made in this region and reflects continued execution of our business plan," said CEO Asim Ghosh during the grand opening this summer.
New biodiesel plant
This year will also see the ongoing construction of 275-million-litre (70-million-gallon) biodiesel plant in Lloydminster, which is expected to complete next year. Archer Daniels Midland Co. plant will be located right next to the company's existing canola-crushing facility.
Since July 1, 2011, all diesel fuel and heating oil sold in Canada must contain at least 2 per cent biodiesel, which should assure steady demand for Archer Daniels Midland's new operation.
ADM has also built five new storage silos as part of a doubling of its canola seed facilities at Lloydminster.
Such investments have increased interest in industrial land in Lloydminster, where the city is also a land developer. Through its infrastructure services land sales, the city is offering Hill Industrial, a 480-acre industrial park with serviced industrial lots. The park is planned as the major industrial hub in the city.
Serviced industrial land in Lloydminster sells for an average of $200,000 per acre, according to the city's economic development office.
Just west of Lloydminster, the 130-acre Wobester Industrial development site is listed as a single package by Colliers International, for $3 million.
from Western Investor September 2012
