November 6, 2018 11:24 am

Recovery in housing starts, slow price growth expect in Saskatoon in 2019: CMHC

A modest recovery in housing starts is expected in Saskatoon for 2019, along with some growth in prices, according to the CMHC 2018 Housing Market Outlook.

Devin Sauer / Global News
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A modest recovery in housing starts in Saskatoon is expected in 2019, according to a new report from Canada Mortgage and Housing Corporation (CMHC).

The 2018 Housing Market Outlook, released Tuesday, said continued employment growth, firmer oil prices, and lower new home inventories are factors in the recovery.

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CMHC said the trend should continue into 2020, but starts will remain significantly below 2014 numbers.

READ MORE: PST, interest rates negatively impacting Saskatoon builds

Expansion in the city’s northeast is expected to support gains in single-detached starts, according to the report, while affordability concerns over rising interest rates will increase production of townhouses and apartment condominiums.

The report said existing home sales will experience a fourth-straight yearly decline in 2018, with stabilization and some growth in 2019. Further gains are expected in 2020 as economic conditions improve, according to CMHC, however it cautioned rising mortgage rates will remain a constraining factor on resale activity.

Home values are forecast to rebound in both 2019 and 2020, said the report, but a key risk to price recovery would be a decline in employment, income, or population growth.

READ MORE: Home sales down, prices steady in Saskatoon during October

In the rental market, CMHC forecasts demand will strengthen and rent will stabilize over the next two years, but vacancy rates will remain above historical levels. Vacancy rates are forecast at 7.7 per cent for 2018, before declining to 7.0 and 6.5 per cent in 2019 and 2020 respectively.

The October vacancy rate hit 10.3 per cent in 2016.

© 2018 Global News, a division of Corus Entertainment Inc.

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