Food bank gets crucial restock amid growing demand

StarPhoenix, May 10, 2016 - Saskatoon residents donated 78,894 pounds of food to the Saskatoon Food Bank and Learning Centre during the 11th annual citywide food drive on Saturday.

That’s an increase compared to last year’s total of 66,000 pounds, executive director Laurie O’Connor said.

The donations come at a crucial time. The food bank has seen a sharp increase in usage — it now serves 20,000 people a month, almost half of whom are children, compared to 12,000 people each month in 2014, she said.

“We’re pretty thrilled to have our shelves restocked.”

The increase in demand is partly due to traditional factors such as housing, transportation and childcare costs, but over the past six months food prices have also increased, she said.

“If someone is struggling, that’s definitely going to put a bigger strain on their budget as well.”

She reminds people that support is still needed through the summer, since families don’t have access to school lunch programs and fewer people in the city are around to volunteer and donate food.

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Residential construction slow but steady, despite weak economy: CMHC

StarPheonix, May 9, 2016 - Despite the ongoing downturn in commodity prices curbing demand and putting downward pressure on prices, Saskatoon’s residential construction sector remains relatively stable, according to a new report from the Canada Mortgage and Housing Corporation (CMHC).

“The big take-away is that we’re seeing sort of a steady pace in terms of housing starts (but) the industry is still facing weak economic conditions, just as they did last year,” said Goodson Mwale, CMHC’s senior market analyst for Saskatchewan, adding that construction is well below peak levels.

Saskatoon builders started work on 238 new units in April, bringing the year-to-date total to 604, down 13 per cent from the 695 housing starts recorded in the first four months of 2015, the CMHC reported. The decline was driven by a 19.1 per cent drop in the number of multi-family units under construction; by comparison, single-family home starts slid 3.7 per cent.

From a wider perspective, the city’s housing start trend — a six-month moving average of the seasonally adjusted annual rate — was 2,496 last month, up nine per cent from the March trend of 2,290 units. By comparison, there were 2,293 housing starts in the city last year and 3,531 the year before.

Mwale attributed the slowdown to low commodity prices — oil, potash and uranium prices are all well below peak levels — slowing net migration and employment growth, the two main drivers of housing demand. While those market fundamentals remain weak, construction has slowed but not stopped, he added.

“(Builders) will slow the pace depending on the environment, but we can’t say that it’s stopped,” Mwale said. “People still need places to live. There’s still some level of demand for new housing. (But) it has slowed from a rapid pace.”

Saskatoon’s residential construction sector is slower than it was in 2013 and 2014, when it posted “record numbers,” but the radiating effects of weak commodity prices do not appear to be causing alarm among the city’s builders, according to the CEO of the Saskatoon and Region Home Builders’ Association (SRHBA).

“They definitely don’t appear to be affecting the market that we represent,” Chris Guérette said. “If you look at how long it takes to sell a property, the turnover rate with new construction is still very, very healthy. Nothing has stalled. Activity is still very productive and healthy.”

The turnover rate is an industry benchmark that compares the cost of goods sold to inventory on hand. Guérette said the city’s residential construction turnover rate is currently 1.26, stronger than the 1.02 recorded last year and as high as it’s been since 2012, when it touched 1.51.

“There’s absolutely nothing alarming here,” she said, adding that local builders are busy and SRHBA’s membership is stable.

While the recent contraction likely forced some smaller builders out of business, more experienced companies are managing the downturn by minimizing speculative construction and carefully tracking inventories, according to the CEO of the Saskatoon Region Association of Realtors (SRAR).

“I think the builders have a pretty good handle on the market. They’re not going to spread themselves too thin and commit to spec homes that they’re going to sit on for a long period of time,” Jason Yochim said, noting that the city’s home builders have largely caught up to demand and many are tackling renovations instead of new builds.

Yochim said while he expects the sector to remain slow through 2016, he’s “cautiously optimistic” it will start expanding next year. That could change if the economy takes another significant blow — perhaps in the form of a poor harvest — but the outlook is currently positive, he added.

“The tap never turns right off,” Yochim said. “There’s still people who have plans to build that house, or who are moving into the city or moving up from a small home to a larger home.”

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Overvaluation and overbuilding remain prevalent in Canada’s housing markets

Ottawa Sun, May 6, 2016 - Overvaluation is detected in nine Census Metropolitan Areas (CMAs) and overbuilding in seven, according to the Canada Mortgage and Housing Corporation’s (CMHC) latest Housing Market Assessment (HMA) released on April 27, 2016. Nationally, CMHC detects moderate evidence of overvaluation.

The HMA serves as an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.

“While we see weak evidence of problematic conditions overall nationally, we do detect moderate evidence of overvaluation, meaning house prices remain higher than the level personal disposable income, population growth and other fundamentals would support,” said Bob Dugan, CMHC Chief Economist.

Report Highlights

Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.

Overvaluation is detected in nine centres while overbuilding is detected in seven. The evidence of overvaluation has increased since the previous assessment in Vancouver, Hamilton, and Saskatoon.

“We see strong evidence of overvaluation in Vancouver’s housing market,” said Robyn Adamache,

CMHC Principal Market Analyst for Vancouver. “Single detached home prices are higher than levels supported by economic fundamentals and inventories of new and resale homes are declining while demand remains high. We’re also keeping an eye on overheating and price acceleration which are slowly advancing but evidence of these conditions remains weak. Overall, we see moderate evidence of problematic conditions in Vancouver.”

Strong evidence of problematic conditions overall is seen in Toronto, Calgary, Saskatoon and Regina. In Toronto, this is due to the combination of price acceleration and overvaluation. “Overall, we detect strong evidence of problematic conditions in the Toronto CMA,” said Dana Senagama, Principal Market Analyst for the GTA. “Of particular concern is the evidence of price acceleration and overvaluation. A tight resale market, with demand outpacing supply has led to higher price growth. The growth in house prices has persistently outpaced economic and demographic fundamentals, thus giving rise to strong evidence of overvaluation.”

In Calgary, Saskatoon and Regina, this is due to the combination of overvaluation and overbuilding.

Moderate evidence of problematic conditions overall is seen in Vancouver, Montreal, Edmonton, Ottawa, Winnipeg and Quebec.

“We continue to detect moderate evidence of overbuilding in Ottawa’s housing market,”said Anne-Marie Shaker, CMHC Ottawa Market Analyst. The number of completed and unsold condo apartment units per 10,000 population has been steadily rising throughout 2015, and rose once more in the fourth quarter, pointing to moderate evidence of overbuilding.”

The increase in unsold units has been accompanied by rising vacancy rates in primary and secondary rental markets pointing to softer demand conditions. While the number of condo units under construction declined in the fourth quarter, inventory management is still needed until the high number of completed and unsold units is absorbed by the market. Conditions in the Ottawa market continue to point to weak evidence of overvaluation due to modest price growth despite soft income performance.

CMHC defines evidence of problematic conditions as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration, or combinations thereof depart significantly from historical averages. The complete HMA, including national, regional and CMA insight and analysis, is available at www.cmhc.ca

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

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Saskatoon And Area Economy Lowered To C Grade

Saskatoon Homepage, May 2,2016 - The Saskatoon Regional Economic Development Authority is grading the local economy a C for the first quarter of the year, which is down from a B- in the last quarter of 2015.

President and CEO of SREDA, Alex Fallon says that doesn't mean everything is doom and gloom.
The organization anticipates moderate to steady GDP growth for the remainder of the year at between 1.5 to 2 per cent.
Saskatoon and area's growing population drives retail and wholesale sales and adds some stability to the economy.
One thing going for the 2nd quarter of the year is an increase in seasonal activity, which includes agriculture.
It's expected construction will pick up this quarter as well, due to increased infrastructure spending with money coming in from the federal government.
Minister of the Economy, Bill Boyd, says it's the diversification and competitiveness of the Saskatoon area that helps to buoy the economy during an economic slowdown.