The Saskatoon and Region Home Builders' Association (SRHBA) says policies from the provincial and federal government are hurting the housing market in Saskatchewan.

The organization’s fourth quarter housing report for 2018 shows new housing construction is at its lowest level in 11 years. New home sales have fallen each of the last six years to levels not seen since 2006.It also says among the provinces, Saskatchewan was last in terms of percentage growth which declined 28 per cent in 2018.

SRHBA CEO Chris Guérette says the addition of PST on new home construction combined with new mortgage rules are exacerbating problems in Saskatchewan’s housing market.

The new mortgage stress test requirement came into effect in January 2018. Anyone taking out an uninsured mortgage must be able to prove that they could continue to make their payments if their interest rate rose by two per cent, or to two per cent more than the Bank of Canada’s five-year benchmark rate.

“That policy was really created for larger centres that were problematic with overheating such as Toronto and Vancouver. Unfortunately it’s disproportionally impacted our province here in Saskatchewan where we’re seeing some drastic numbers. We crunched the numbers nationally and the stress test has squeezed out of the market 147,000 home buyers.”

During meetings in Ottawa this week, Guérette is hoping the government will consider relaxing mortgage rules to allow more first time home buyers into the market. She says the housing market in Saskatchewan is much different than in Toronto or Vancouver.

“This is a national policy and housing is a very local issue. So you can’t simply have a national policy and not recognize that local difference.”

She also says the addition of PST on new home construction by the provincial government has led to an underperforming housing market. She says the province should look at a PST rebate on home construction.

The SRHBA says the economy has recovered from the recession in the oil sector. However, it forecasts the overall standard of living in Saskatoon is unlikely to reach 2014 levels anytime soon.