From the major urban centres to small towns and rural communities, the Canadian real estate market has witnessed impressive growth since the early days of the coronavirus pandemic. But this unprecedented activity in the face of a wide-spread housing supply shortage are thought to be the cause of a nationwide housing affordability crisis, leaving many young Canadians feeling defeated and abandoning their dreams of home ownership. Is this also the case in the Saskatchewan real estate market?
Compared to the rest of the country, Saskatchewan real estate is relatively affordable, whether buyers are looking to make a move to Regina, Saskatoon, Moose Jaw, Prince Albert and all point between. So far, the concerning lack of housing supply across so many local real estate markets nationwide, is luring families to Saskatchewan, where it’s possible to get more bang for their loonies.
How did the Saskatchewan real estate market perform in December, and 2021 as a whole? The housing data points to a robust provincial market in the second year of the public health crisis.
Sales Soar Across the Saskatchewan Real Estate Market
According to the Saskatchewan Realtors Association (SRA), residential sales tumbled 7.3 per cent year-over-year in December, totalling 864 units. But that’s not the end of the story.
Saskatchewan real estate prices surged to close out 2021, with the HPI benchmark price climbing at an annualized rate of 6.1 per cent to $284,200.
New residential listings fell 12.2 per cent in December compared to a year ago, with 994 new units coming on stream. Meanwhile, active housing listings declined 13.5 per cent year-over-year, totalling 5,402 units.
But while sales eased slightly over the month of December, 2021 was a record-breaking year for the province’s real estate market.
SRA data show that housing sales soared 17 per cent to a new all-time high of 17,387 transactions, breaking the previous record set in 2007. Housing prices sat below the previous highs of 2014, with single-family home and condominium valuations coming in one per cent and 17 per cent below the record high, respectively.
“Improved savings from those not financially impacted by COVID-19, combined with low lending rates, has supported the strong sales environment we saw throughout 2021. For Saskatchewan, this shift was welcome news as the economic landscape pre-pandemic caused challenges in the housing market,” said SRA CEO Chris Guérette in a news release.
Like the rest of Canada, tight market conditions were also a prevalent factor in Saskatchewan last year.
New residential listings were 16 per cent below the long-term average, but new housing construction was higher in 2021 compared to the previous year. According to Canada Mortgage and Housing Corporation (CMHC), housing starts advanced 38.2 per cent to 3,509 in the first 11 months of last year.
Overall, the Saskatchewan real estate market was booming in 2021. The question now is, will this be replicated in 2022?
Is a Housing Affordability Crisis Coming to Saskatchewan?
The province still enjoys good housing affordability compared to many other regions across Canada. However, industry experts are worried that this could change if leaders fail to keep a watchful eye over the situation, says Guérette in an op-ed in the Regina Leader-Post.
Guerette noted that there has been a pressure upon inventory, which leads to higher prices and diminishing affordability. “Once you then add inflationary pressures, supply chain disruptions, chronic labour shortages and potential interest rate increases—as well as this pandemic that just won’t go away—you now have an impressive list of housing challenges,” he wrote.
“We must keep our sights on this. It’s the foundation of our competitive edge,” Guerette added.
But with the Bank of Canada (BoC) expected to raise interest rates at least three times this year, rumoured to begin in the second quarter, some experts anticipate that the boom could slow down. However, economic sustainability could be one of the biggest factors for the Saskatchewan real estate market moving forward.
“If we prove that story more often, it will without question change the conversation on how valuable our housing continuum really is for Saskatchewan’s growth,” he said.