Saskatchewan Real Estate: Still the Go-To for Cheap Housing?

Over the last couple of years, the Saskatchewan real estate market has been competing with the Newfoundland and Labrador housing sector for the nation’s most affordable housing market.

Of course, the broader Canadian real estate industry has changed over the past year amid the Bank of Canada’s inflation-fighting rate hikes. New trends are forming, and the pandemic-era boom has been gradually coming to an end.

Does this mean that Prairie province’s cheap housing is also being tossed into the dustbins of history? While Saskatchewan faces upward pressure due to limited housing inventory, prices remain relatively affordable for families trying to buy a home.

A Snapshot of the Saskatchewan Real Estate Market

According to the Saskatchewan Realtors Association (SRA), residential property sales fell 19 per cent year-over-year in February, totalling 854 units. However, despite the slump in sales activity, the numbers are higher than before the coronavirus pandemic and above the ten-year average.

On the price front, the benchmark for Saskatchewan home prices inched 0.35 per cent higher month-over-month to $318,500. Compared to the same time a year ago, prices swelled 0.4 per cent.

Association data show that the Saskatchewan real estate market supply remains below long-term averages. In February, new residential listings plunged 18 per cent year-over-year, totalling 1,360 new units. This was close to 28 per cent below the ten-year average. In addition, months of supply topped six months, although this is down six percent from the same time a year ago and 31 per cent below the decade average.

“We continue to see higher lending rates and supply challenges contribute to a pullback in sales. I’m beginning to sound like a broken record, but our biggest concern is still inventory levels, specifically in the more affordable segment of our housing continuum,” said Association CEO Chris Guérette in a statement.

New housing construction activity has been off to a strong start. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts surged more than 76 per cent, totalling 448 units. In the first two months of 2023, there have been 566 housing starts in the Saskatchewan housing market.

Industry observers note that the Saskatchewan housing market is expected to return to a more balanced market, contributing to its affordability status.

“Saskatchewan remains one of the most affordable jurisdictions in the country with a resilient market that is well-positioned for stable demand in home ownership,” added Guérette.

But how did some of the provincial markets perform halfway through the first quarter?

In Saskatoon, the benchmark price in February climbed close to three percent to $372,400. In Regina, the benchmark price dropped 0.64 percent to $310,200.

Meanwhile, these numbers are roughly in line with the latest RE/MAX 2023 Canadian Housing Market Outlook that projected the average sales price in the Saskatoon real estate market would rise three percent while unit sales would tumble four percent. Price and sales estimates for the Regina housing market are expected to be flat this year.

“The market will remain balanced and steady through 2023, and we do not anticipate a major change in the average residential sale price or number of sales in 2023 as a result,” said Jeremy Cosette of RE/MAX Crown Real Estate in a statement. “We’ll see a lot of similarity to 2022 across the board, and although housing supply will likely fluctuate throughout the year, overall, it’ll level out and remain unchanged in 2023.”

Will Supply Be the Permanent Challenge?

Guerette was blunt in a recent interview with MPA Magazine, telling the publication that shrinking supplies and higher lending rates are resulting in a pullback in provincial sales activity.

From Saskatoon to Moose Jaw to Swift Current, inventory levels are below their ten-year averages, which has coincided with below-average year-to-date sales.

Still, the Saskatchewan government has noticed some of the latest developments, particularly in relation to urban housing starts, which were the best in the country.

“Saskatchewan’s strong economy continues to be one of the best in the nation,” said Trade and Export Development Minister Jeremy Harrison in a news release. “Today’s increase in housing starts is impressive and is further proof that Saskatchewan is the best place to live, work, and raise a family. This is growth that works for everyone.”