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Moose Jaw… A Great Place to Call Home
2018 MOOSE JAW HOUSING STARTS For the period January 1 to June 30, 2018 the City issued 11 permits for new dwellings, valued at $3,354,900 compared to 24 permits issued for the same period in the prior year valued at $3,210,140. In 2016 Moose Jaw recorded 53 building permits for new dwellings valued at $20,503,339 compared to 53 permits in 2015, valued at $16,773,000. Construction of multi-family condo units remained slow in 2016, 2017 & 2018 as the high inventory of new and resale condos cooled the pace of new projects, especially multi-family units. The record for dwellings starts was set during 2012 with 132 starts valued at $37.4M.
According to CMHC’s Market Outlook Report for the Prairie Region, economic conditions have remained weak, as the low commodity environment continued to negatively affect economic activity and consequently, labour market conditions. As a result, builders have lowered new production focusing instead on inventory reduction, especially multi-family units. Housing starts are forecasted to stabilize in 2018 as inventory reduction holds back growth. By 2019, reduced inventories, stronger economic and employment growth will increase housing starts. In Saskatchewan total housing starts are projected to increase to 4,600 to 5,200 units in 2017 and 4,900 to 5,500 in 2018, compared to the 5,000 units built in 2016 and 5149 units in 2015.
Housing starts are regarded as an indicator of a region’s economic vitality. CMHC says in Saskatchewan there is “moderate” evidence of overbuilding and “strong” evidence of overvaluation in some markets. The scaling back of construction has helped reduce housing inventory going into 2018, but even so the trend of more homes for sale than buyers is likely to continue well into 2018.
For the same reasons, the number of resale transaction in Saskatchewan is also down but improving economic conditions should gradually lift the number of MLS sales. In Saskatchewan, resales are projected to stabilize in 2017 to a range of 11,600 to 11,900 transactions, compared to 11,500 - 11,700 MLS sales in 2016 and 12,245 sales in 2015.
The Buyer’s market conditions throughout 2016 caused the average MLS price to decrease to $289,700 from $297,487 in 2015. This year prices are expected to stabilize and then firm up due to economic and demographic growth. The average price will gradually rise to a range between $291,500 to $300,500 in 2017 and between $294,500 and $304,100 in 2018.
In the past few years, Saskatchewan’s large influx of migrants has generated momentum in resale market. Relatively improving economic conditions in other provinces has moderated the inflows of migrants. For the housing market, the slowdown in population growth and employment comes at a time when a glut of supply is looking to be absorbed with a record number of completed but unoccupied units.
MOOSE JAW HOUSING REPORT
2017 MOOSE JAW HOUSING OUTLOOK “New home” inventory and increasing supply of resale homes remains a constraining factor to single-detached starts in 2017. Population growth is necessary to allow existing single-family and multi-family units to be absorbed. The average MLS price is expected to remain stable or possibly moderately decline. The continuation of low interest rates in 2017 will support home sales although the recent addition of PST on labour for new homes may prompt home owners to look at used homes as a more affordable option.
2018 MOOSE JAW MLS RESALE MARKET HOUSING The new matrix Home Price Index (HPI) which measures residential price trends based on four benchmark home types, is considered more accurate of housing prices than average or median. In July 2018, the city of Moose Jaw’s MLS Home Price Index (HPI) reported a residential Benchmark price of $221,300 compared to $219,665 in the same month last year and second lowest compared to neighboring cities.
For the period January to July 2018, the city of Moose Jaw recorded 55 sales compared to 64 for the same period in 2017. Meanwhile the year to date number of new listings is down with 354 for the period compared to 396 last year. The average days on the market has increased to 82 days in 2018 compared to 80 in 2017. Year to date 2017 experienced the poor “solds to listings” performance and is deemed a “buyer’s market” continuing the long-term trend since 2015. The sales to new listing ratio this year is 37.9 per cent year to date compared to 46.7 per cent for the same period last year.
MOOSE JAW RENTAL MARKET REPORT
2017 PROVINCIAL RENTAL MARKET HIGHLIGHTS Vacancy rates in the province have increased while rents have declined in many of Saskatchewan’s urban centre as supply of new rental units out paces demand. As a result of weaker migration to the province and recent additions to the rental stock, the provincial vacancy rate saw upward pressure in the October 2016 to 9.4 per cent up from 6.8 per cent in October of the prior year. According to CMHC’s Fall 2017 Survey, apartment vacancy rates ranged from a low of 3.3 per cent in Moose Jaw to a high of 25.3 per cent in Estevan. Two bedroom apartments had the highest vacancy rates causing rent to decrease by 1.2 per cent.
The rental supply in the province increased by 567 units - with a significant rise in condominium rentals. Overall, the increase in supply in both the primary and secondary rental markets and the decrease in demand resulted in higher apartment vacancies in the Province. The average monthly rent for a two-bedroom apartment in Saskatchewan urban centres was down to $1,051 in October 2017 compared to $1053 in October 2016. This compares to $1,075 in April 2015.
2017 (FALL REPORT) MOOSE JAW RENTAL MARKET REPORT Increased Inventory lifts vacancy rate Supply and demand are considered in balance when vacancy rates are above three per cent and closer to five per cent. Over the past five years, builders have taken advantage of tax incentives to increase the local stock of purpose built rental units. Moose Jaw has over 1,300 rental units.
Moose Jaw’s Fall 2017 vacancy rate was 2.3 per cent, down from 3.3 per cent in October 2016 and 3.4% in October 2015. Despite the increased rental supply, CMHC reported that Moose Jaw recorded the lowest vacancy among all other communities in the province. Increased supply has helped to stabilize Moose Jaw’s vacancy rates which were a challenging 2.7 per cent in October 2013 and 1 per cent in 2012. In the past, low vacancy rates (around 1%) were a barrier to attracting new workers.
MOOSE JAW - RENTS ARE DECLINING According to CMHC’s 2017 Fall Rental Report, Moose Jaw’s average rent has increased to $817/month compared to $802 in October 2016, up from $806 in October 2015 and $795 in October 2014. Moose Jaw’s average rent remains one of the lowest in the province, with only Swift Current ($798/month), Weyburn ($740/month) and North Battleford ($795/month) experiencing lower rates. This compares to Regina at $1,026/month. Estevan is feeling the brunt of the decline oil and gas sector with the city’s average rent, once the highest in the province at $1,036/month, down 14.5 per cent to $906/month.