Saskatoon catches up on housing construction as Calgary, Vancouver pull back

Saskatoon’s homebuilding is picking up after the city’s population grew by nearly 19 per cent in five years, putting pressure on housing supply.

The increase comes as construction slows in other Western Canadian cities, where builders are starting fewer homes. In July, builders started work on 400 homes in Saskatoon, up 24 per cent from the same period last year, according to Canada Mortgage and Housing Corporation’s latest data, while starts fell by 20 per cent in Calgary and 42 per cent in Vancouver.

A shortage of existing homes is helping drive Saskatoon’s increase. The city had only about 1.3 months of resale supply, said Nicole Burgess, CEO of the Saskatoon and Region Home Builders’ Association.

“When people aren’t finding what they need on the resale market side, it makes a whole lot of sense for them to pursue new construction,” Burgess told Canada’s National Observer.

Saskatoon’s housing market has traditionally been slow and steady, Burgess said. But that pace was not enough to keep up with the city’s population growth over the past three years.

“I kept saying, ‘I don’t know where people are living,’” she said. “There just is not enough housing to accommodate the growth that we experienced.”

Saskatoon typically adds between 1,700 and 2,100 new homes a year, said Lesley Anderson, the city’s director of planning and development. But that pace was not enough when population growth jumped from its usual 2 per cent a year to about 4 per cent in 2022 and 2023.

Anderson said Saskatoon’s resale market has struggled to meet the needs of a growing population. Much of the city’s older housing stock consists of smaller wartime homes, which may not suit growing families.

As resale prices rise, the gap between existing and new homes is narrowing. Burgess said new construction gets a stronger boost when that gap falls to about 25 per cent or lower. Saskatoon’s relative affordability is also attracting buyers who may not be able to afford a home elsewhere.

Burgess said new construction gets a stronger boost when a new home costs no more than 25 per cent over the cost of an existing one.

The city’s approach to building new neighbourhoods is another factor. Developers do not prepare entire neighbourhoods at once. Roads, water lines, sewer systems and lots are built in stages, so builders can speed up or slow down as demand changes without putting too many homes on the market at once. “I don’t think we’ll get to a place where we have a significant overbuild because of that system,” Anderson said.

Some of Saskatoon’s new homes are being built with legal secondary suites or designed so a suite can be added later, Anderson said. Saskatchewan offers grants of up to $35,000 to help build them.

Secondary suites add a rental unit while giving homeowners rental income that can help them qualify for or manage a mortgage, Burgess said. Saskatoon’s zoning rules make it easier to include suites during construction when it is cheaper. “It’s far more efficient to do that than trying to retrofit,” she said.

Federal GST measures may also be supporting new housing in Saskatoon, said Taylor Pardy, an economist with the Canada Mortgage and Housing Corporation. In 2023, developers building qualifying rental apartments can recover all the federal GST they pay on construction, making those projects less expensive. A rebate introduced in 2025 allows eligible first-time buyers to claim back up to $50,000 in GST when they buy a new home, lowering their upfront cost.

Pardy said Saskatoon’s housing starts in 2025 climbed to about 3,812, compared with a 10-year average of roughly 2,310. Starts were 10 per cent higher in the first seven months of 2026 than during the same period last year. He expects construction to slow but remain above the city’s historical average.

Pardy said Saskatoon’s immigrants mainly increased demand for rentals, while Calgary also attracted migrants from other provinces looking to buy. That helped fuel a bigger building boom, which is now slowing as builders work through unsold homes. Vancouver is facing a similar pullback as inventories rise and builders are holding back on new projects until that inventory is sold, Pardy said.

“These markets are in different parts of the cycle,” he said. “Inventories on the new-home side of the market in Saskatoon are still fairly low. The resale market is very tight and that provides support for starts.”

Across Canada, housing starts rose 47 per cent in Quebec City, 38 per cent in Winnipeg and 13 per cent in Regina compared with July last year. They fell 10 per cent in Toronto, 17 per cent in Ottawa-Gatineau and 62 per cent in Halifax.

Sonal Gupta / Local Journalism Initiative / Canada’s National Observer.