Saskatoon’s housing market remains “problematic” due to strong evidence of overbuilding, according to a new report from Canadian Mortgage and Housing Corporation (CMHC).
CMHC reported on Wednesday in its second quarter housing market assessment that Saskatoon continues to have high inventory levels of new housing, particularly in row housing and condominium apartments.
One factor contributing to the high inventory levels is the rental vacancy rate, which Goodson Mwale, CMHC’s senior market analyst for Saskatchewan, said was “above the critical threshold.”
The apartment vacancy rate in October 2016 was 10.3 per cent, above the long-term threshold of 7.1 per cent.
CMHC also reported that there are moderate signs of overvaluation in Saskatoon’s housing market, stating that an increase in population was mitigated by a decline in employment and in real disposable income.
The report also stated there is no overheating or price acceleration in Saskatoon’s housing market, with the number of homes sold compared to new listings dropping to 36 per cent during the first quarter.
The seasonally adjusted average MLS price declined 2.8 per cent to $335,436, according to CMHC.