City sees big drop in residential construction

The pace of residential construction in Saskatoon fell off sharply in the first five months of the year, driven downward by a collapse in the number of new multifamily buildings under development, according to new data from the country ’s mortgage insurer.

At the end of May, Saskatoon-based builders had started work on 547 new units, down 25 per cent from the 730 housing starts recorded in the same period last year, the Canada Mortgage and Housing Corp. (CMHC) reported Thursday.

“Local builders have continued to scale back production of multi-family units, while focusing on drawing down high inventory of newly completed and unsold apartment units,” the CMHC said in a news release.

“Despite an improving labour market in the first quarter, local home builders have remained cautious, with construction activity largely geared toward the single-detached sector where inventory levels have been declining.”

Broken down by category, construction of single-family homes rose one per cent, to 388 from 384, in the first five months of 2017. That gain was more than offset by a 54 per cent slide in multiunit construction, the total of which fell to 159 from 346.

The CMHC’s report comes as Saskatoon recorded its highest-ever number of real estate listings. Sales, however, were virtually flat over the first five months of the year, falling just 1.6 per cent, according to the Saskatoon Region Association of Realtors (SRAR).

Prices have also remained flat, with the average selling price during the first five months of 2017 climbing 0.6 per cent, to $349,067, compared to the same period last year, SRAR reported earlier this week.

The city’s apartment market is a different story. Vacancy rates remain well above the historic high of 10.3 per cent reported by the CMHC last November. Experts have said up to 18 per cent of the city’s apartments could be empty.