Saskatoon's record benchmark home price due to combination of factors

The Saskatchewan Realtors Association says July was a strong month for home sales, with the city of Saskatoon hitting a new record benchmark price of $384,200.

“This is the highest benchmark price in the province, and it happened in July,” said Chris Guérette, CEO of the Saskatchewan Realtors Association. “And we foresee prices will probably keep going in that same direction.”

Benchmark prices are calculated based on recent sales data for a specific type of home and neighbourhood, which is more meaningful than a simple average.

Only Estevan saw monthly and year-over-year prices go down in the province, while Prince Albert, Yorkton and Meadow Lake all set records for July benchmark prices.

Guérette says the rising benchmark price is due to a number of factors.

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“The market is really busy, so there’s a lot of buyers and not a lot of inventory out there,” she said. “So that puts pressure on prices, and that’s what we’re seeing in Saskatoon particularly.”

With nearly 500 homes sold in July, inventory remains tight. Guérette says there’s only about two months' worth of supply in the city, which raises demand and price.

“We would love to see that sitting more towards the four and six months’ supply because that indicates a balanced market,” Guérette told CTV News.

The rising benchmark price of a home in Saskatoon is also making things tricky for mortgage brokers. With the Bank of Canada raising the prime rates, it directly impacts clients’ ability to purchase, refinance or renew mortgages.

“The Bank of Canada prime rate changes do directly impact clients with variable or adjustable-rate mortgages, as their rate changes when the prime rate changes,” said Tammy Wandzura, Saskatoon mortgage broker.

“As fixed rates move up this is significantly impacting mortgage applications.”

Wandzura says changing rates are impacting her clients.

“We are regularly having to ask if our clients have co-signers they can add to the mortgage to help them qualify in the price range they are hoping for,” she said, adding the recommendation that prospective homebuyers consider getting pre-approved and getting a rate hold in place, which also holds the qualifying rate.

Despite the increasing benchmark price and low inventory in the city, Guérette says it’s a positive sign that Saskatchewan is an appealing place to live for a variety of reasons. She says the province is still an affordable place to live.

“We still have very affordable housing compared to the rest of the country and really great amenities and quality of life,” she said. “That’s probably why people are buying and staying here or moving here. And obviously, we’d love to see more of that.”