SASKATOON – After several robust years for Saskatoon homebuilders, the Canada Mortgage and Housing Corporation (CMHC) predicts a 32 per cent decline in new home starts in 2015, compared to the previous year. The CMHC’s Fall 2015 Housing Market Outlook forecasts 2,400 total housing starts this year, followed by a stabilizing trend through 2017.
In 2014, there were 3,531 new starts in the Saskatoon Census Metropolitan Area (CMA).
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“The last three years [were] the three strongest years for housing absorption, or new housing absorption, in Saskatchewan’s history,” said Warren Stewart, CFO of North Ridge Development Corporation.
Weaker economic conditions, a strong resale market and a surplus of new homes currently on the market have slowed new builds, according to the CMHC outlook.
“We need to wait until that surplus inventory gets whittled down,” Stewart said. “The numbers are coming down, it’s just going to take some time.”
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The average cost of a house is also on the decline – from $341,061 in 2014 to $338,700 in 2015. Prices are expected to return above last year’s mark in 2016 and 2017.
“Buyers actually have choice,” said Ashley Turner, president of the Saskatoon Region Association of Realtors.
“They can look at 20 [or] 30 houses before they actually make their decision, so I think it’s a healthy thing actually.”