The number of empty apartments in Saskatoon hit a record high in October 2016. What exactly caused this and what does it mean for students?

The Canada Mortgage and Housing Corporation reported that apartment vacancy rates reached an historic high of 10.3 per cent in Saskatoon. By comparison, vacancy rates at the same time last year were a mere six per cent.

Now’s a good time to start renting.

There are two primary causes of this dramatic upswing, but perhaps the most powerful has been the collapse in commodity prices — beginning in 2014 with the decline in oil and gas. The value of both potash and uranium have both declined significantly over the past two years as well.

These four commodities are all significant contributors to Saskatchewan’s economy. As the price for which these commodities can be sold into world markets has declined, so too have the profit margins of the entities extracting these resources. The resulting effect is job losses throughout the energy and mining sectors.

So, how does this affect Saskatoon? Well, Saskatoon is the financial and logistical hub within the province for resources. The commodity downturn has slowed the economy, therefore affecting jobs in Saskatoon as well.

The CMHC reported that there are 3,200 less full-time jobs available in Saskatoon compared to the same time last year. Not only would losses be seen in the commodity sectors, but spin off effects would result in losses in other industries too.

In sum, fewer jobs means people moving away. Now there is suddenly a glut of rental properties with no one to rent them. That’s the first reason we’re seeing such high vacancy rates. The second cause is related to overbuilding.

A separate report released by the CMHC has indicated that there are strong signs of overbuilding occurring within the city. This is likely a result of the strength in the economy witnessed pre-2015.

When times were good, people were getting jobs and demanding more homes. The construction industry responded and many homes were built and planned. However, as the economy slowed, the construction industry inevitably takes time to adjust to the change in demand. The end result is an oversupply of new construction. As new owners then purchase and subsequently attempt to rent, the vacancy rate climbs higher yet.

So what does all this mean for students? Well, if you’re looking to either start renting or your lease is going to expire and you need a new place to rent, it’s good news. Due to a large supply of apartments and a dwindling demand, apartment rental rates will begin to decline if this trend continues. As of now, rents have been reported to have decreased by 0.9 per cent since the same time last year. It’s not much, but rental rates will likely continue to fall as long as the vacancy rate remains elevated.

This is great for students who are in the midst of their studies, but not so great for those getting ready to graduate. Cheap rent is awesome, but if you can’t find a job to pay that rent, well then, let’s face it — you’re screwed. The condition of the economy is all the proof one needs. Jobs are more scarce than a few years ago. They’re still out there, but just harder to find, depending on your specialty and area of interest.

That being said, there will always be winners and losers in a market economy. Saskatchewanians must remember though — living in Saskatchewan is living in the shadow of resource extraction. When resources are strong, Saskatchewan is strong. When resources are not — we move to Ontario.

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Bodan Worobetz

Photo: Jeremy Britz / Photo Editor