Saskatoon housing market on the rebound, report says

Saskatoon’s real estate market is on the rebound, according to a new report.

The Re/Max 2023 Canada Housing Barometer Report examined average prices and new mortgage values across the country between Q3 2012 and Q3 2022. Part of the report compares loan-to-value (LTV) ratios, which is how much people have in a mortgage loan compared to the value of their homes. According to the report, four markets, including Saskatoon, were over 2012 levels, but that is something expected to change.

“As we head into 2023, there are likely to be challenges, but a healthy number of homebuyers are expected to continue to enter the country’s housing markets from coast to coast,” Elton Ash, Re/Max executive vice president said.

“The trend toward smaller markets should continue to play out in Atlantic Canada, Ontario and Western Canada —areas where in-migration from more expensive markets has occurred recently. Major centres in Alberta and Saskatchewan are expected to see strong growth in the year ahead as provincial economies continue to operate on all cylinders.”

According to the report, the lowest loan-to-value ratios were in the most expensive markets, Vancouver, Toronto and Hamilton. The highest LTV ratios were in Regina and Edmonton. Nationally, ratios were at 57 per cent.

“The bottom line is that the dream and desire for home ownership is unmistakable,” says Re/Max president Christopher Alexander.

“The mechanisms in place to underpin stability are working, and although more challenging conditions in 2023 may cause some to temporarily take pause, the longer-term outlook remains positive. Once the Bank of Canada has signalled that it is done with quantitative tightening, the market is expected to return to more normal levels of home buying activity overall.”

The report said the demand for housing in Saskatoon was strong, particularly for single-detached homes. As more people move into the city, the demand for new construction in the suburbs is increasing.

“While price growth over the past decade has been tempered by challenges in the oil and gas sector, loan-to-value ratios have edged up three per cent to 81 per cent over the 10-year period. This trend is expected to reverse itself as Saskatchewan’s resource-based economy gains serious momentum in the years ahead,” the report said.

During the pandemic, the report said, construction on single-detached homes stopped and builders focused more on condo projects.

“As such, upward pressure on single detached housing values has increased over the past year, with supply expected to fall significantly by year-end 2023,” the Re/Max report said. “Construction of single-detached homes has picked up over the past year, with new pricing reflecting increased cost of building materials, but it will take time before completed product comes to market,”

Re/Max said their research found that buyers in Saskatoon were looking at innovative ways to deal with rising costs of ownership. These include renting out basement suites or an extra room. It also includes multi-generational families living in one house.

“Dual-income young professionals are also exercising caution when it comes to buying as well—although they qualify for a mortgage of $600,000, most will come in well under that amount,” the report said.

According to the report, most first-time home buyers have their own savings of five to 10 per cent for a down payment. Re/Max also found that those born and raised in Saskatoon were “driving demand for older bungalows in established neighbourhoods.”

The report also foresees a strong housing market in Saskatchewan’s future.

“With Alberta and Saskatchewan expected to lead the country in GDP growth in 2023, real estate markets in these two provinces are set to out-perform all others in the year ahead.”