Start Phoenix, December 24, 2015 - A new report indicates “negative expectations” for Saskatoon’s housing market in the short and long term, but it is “not a big negative,” according to a Conference Board of Canada economist.
“We’re faced with a situation where there’s been a huge growth in housing starts over the last few years matched by huge GDP growth, but the market is now a little oversupplied,” Jane McIntyre said.
“So what we’re going to see over the next few years is, basically, housing starts staying similar to where they are.”
Released Wednesday, the Conference Board of Canada’s latest expectations for metropolitan housing starts are based on data from the Canada Mortgage and Housing Corporation (CMHC) data, residential building permit data and its own economic indicators.
Saskatoon’s negative forecast amounts to a “correction” to use up surplus inventory, or a return to normal growth following a period of rapid expansion in the city’s real estate market, McIntyre said.
There were 295 housing starts in Saskatoon in November, bringing the city’s year-to-date total to 2,096, a 37 per cent decrease compared to the same period last year, the CMHC reported earlier this month.
The City of Saskatoon issued 3,342 residential building permits worth $424 million in the first 11 months of 2015, down in quantity and value from the 3,939 permits worth $578 million it issued in the same period last year.
“Housing starts were at 3,500 units in 2014 (and) our forecast for 2015 is quite a bit lower than that,” McIntyre said.
“Moving forward we expect to be more in that kind of range, 2,400 (or) 2,500 units per year, as opposed to over 3,000 units per year.”