SASKATOON -- New home construction in the Saskatoon area continued to slow down in 2019.

A report from the Saskatoon and Region Homebuilders Association (SRHBA) shows new home sales dropped nine per cent while new housing starts fell 19 per cent. It also says the number of building permits issued dropped 9.7 per cent.

The report is a snapshot of the new home market in the SRHBA which includes Saskatoon, Warman, Martensville, the Rural Municipality of Corman Park, Osler and Prince Albert.

The organization says the new home market is struggling because of economic factors and government policy.

“Saskatchewan households continue to feel the burden of recent public policies such as the mortgage stress test, the PST on new housing construction, and increasing fees at the municipal level. Saskatoon’s economy was held hostage to external factors that pushed the region’s economic growth into a recession in 2019,” the report reads.

But it does reveal a bright spot for home builders in the multi-family housing market. It says the uncertain economic conditions mean more are turning to the rental market, which fueled demand.

“There were 664 multi-family building permits in the SRHBA region which represents a 17.5% increase compared to 2018. It is also important to note that the vibrancy in downtown is gaining momentum,” the report says

The outlook for 2020 is expected to include some small improvements in the new home market, driven by a moderate recovery in the economy and cheap borrowing costs. The number of new homes still unabsorbed has also declined significantly since 2017.

The report says numbers from the Conference Board of Canada anticipate Saskatoon’s economy to rise 1.6 per cent in 2020.