There’s still strong evidence of overbuilding in Regina and Saskatoon’s housing markets, according to a report released Wednesday.
Canada Mortgage and Housing Corp. says Saskatoon’s housing market continued to show strong evidence of problematic conditions in the second quarter of 2017.
The report notes that Saskatoon’s apartment vacancy rate of 10.3 per cent last October was well above the long-term threshold of 7.1 per cent.
“As well, the number of completed and unabsorbed units per 10,000 people was above historical averages,” CMHC said in the report.
“As in previous quarters, much of the unsold inventory continues to be accumulated in the multi-family sector, primarily in row housing and condominium apartments.”
Declining price trends and increased demographic growth have lowered the degree of overvaluation in Saskatoon, but not enough to warrant changing the assessment from “moderate,” CMHC said.
The seasonally adjusted average Multiple Listing Service price in Saskatoon fell 2.8 per cent to $335,463 in the fourth quarter of 2016.
CMHC’s overall assessment of Regina’s housing market has been lowered from strong to moderate evidence of problematic conditions.
However, the agency says there’s still strong evidence of overbuilding in Regina. The city’s rental vacancy rate of 5.5 per cent last October was above the long-term threshold of 4.9 per cent.
“While new inventory levels receded during most of 2016, the number of completed and unsold units per 10,000 population was still above the framework’s critical threshold of 11.3 units in the fourth quarter,” CMHC said.
“Together, these two factors contributed to continued strong evidence of overbuilding in Regina.”
Evidence of overvaluation has eased from moderate to weak in Regina. The seasonally adjusted average MLS price in the city was $307,145 in the fourth quarter of 2016, a decrease of 1.8 per cent from the previous quarter.
CMHC says its overall rating for Canada’s housing market will remain at “strong evidence of problematic conditions.” Meanwhile, evidence of overvaluation at the national level has been downgraded from strong to moderate.
