A moderate degree of vulnerability still exists in Saskatoon’s housing market due to overbuilding, according to a new report from Canada Mortgage and Housing Corp. (CMHC).
In its second-quarter assessment for 2019, CMHC said there still is evidence of moderate overbuilding.
The report said inventory levels of completed and unsold properties have been declining since early 2016, with the inventory of new housing units remaining below the critical threshold in the fourth quarter of 2018.
However, CMHC said the annual rental vacancy rate remains high. In 2018, it was 8.3 per cent, above the critical threshold of 7.69 per cent.
“The (housing market assessment) framework continues to detect a moderate degree of vulnerability in Saskatoon’s housing market,” said CMHC’s Goodson Mwale.
“While the ratings on overheating, accelerating prices and overvaluation remain low, an elevated annual rental vacancy rate above its critical threshold signals moderate overbuilding.”
CMHC said the sales-to-new-listings ratio fell to 39 per cent in the third quarter of 2018, well below 85 per cent threshold to indicate overheating in the market.
The report also found average prices for single-detached homes were relatively stable in the final quarter of 2018 compared to the same period in 2017, but benchmark price for row and apartment units were off five per cent over the same time period.