SASKATCHEWAN FARING BETTER THAN OTHER MARKETS DESPITE INVENTORY CHALLENGES

In recent weeks, and although not all segments of the market but we have began to see multiple offers and delayed presentation offers again on some properties. 

There were 854 sales recorded across the province in February, a year-over-year decline of 19 per cent. However, while sales are down year-over-year, sales activity remains stronger than pre-pandemic levels and above long-term, 10-year averages.

As seen in prior months, Saskatchewan continues to report new listings and inventory levels significantly below long-term trends. There were 1,360 new listings in February, down 18 per cent year-over-year and nearly 28 per cent below 10-year averages. While the months of supply did push above six months, inventory levels were down 6 per cent year-over-year and 31 per cent below 10-year averages.

“We continue to see higher lending rates and supply challenges contribute to a pullback in sales,” said Association CEO Chris Guérette. “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.”

The provincial benchmark price reached $318,500 in February, slightly higher than the $317,400 recorded the month prior and 0.4 percent higher than February 2022.

“Year-over-year sales declines were to be expected as we returned to a more balanced market where sales activity is more consistent with the historical 10-year averages,” said Guérette. “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."

City of Regina

Sales activity slowed for the second consecutive month, contributing to a year-to-date decline of 21 per cent. Despite the decline, sales activity remains consistent with long-term trends for this time of year. While both sales and new listings have improved over January levels, the monthly gain in new listings did not change the inventory situation. February inventory levels fell to the lowest level reported for the month since 2013 and the months of supply once again fell below four months.

Regina reported a benchmark price of $310,200 in February, slightly below the $312,200 reported in January but well above the February 2021 price of $295,900.

City of Saskatoon

Sales activity slowed for the second consecutive month, contributing to a year-to-date decline of 19 per cent. Further declines in new listings kept inventory levels 36 per cent below 10-year averages for the month and the months of supply remained under four months.

Saskatoon reported a benchmark price of $372,400 in February, up from $366,000 in January and nearly three per cent higher than this time last year.

SASKATCHEWAN REMAINS RESILIENT, SUPPLY LEVELS A MAJOR CONCERN

Pullbacks in both the attached and detached sectors resulted in 631 sales being recorded across the province in January, a year-over-year decline of nearly 16 per cent. While January sales are lower than the activity reported over the past two years, sales remain consistent with pre-pandemic levels.

Despite gains in new listings, January inventory levels were at their lowest levels reported in over a decade. While inventories did improve in homes priced above $300,000, it had little impact on the low inventory situation that continues to be experienced across the province.

“Rising lending rates paired with ongoing inflationary pressures are impacting what individuals can afford, and our market has struggled to see improvements in supply levels in lower-priced homes,” said Saskatchewan REALTORS® Association CEO Chris Guérette. “Prospective buyers impacted by rate hikes are also faced with less choice in the more affordable segment of our market. Without question, these factors are contributing to a pullback in sales activity.”

Following two consecutive years of price growth, the total residential benchmark price remained relatively stable in January. However, apartment condominiums reported further gains in benchmark prices due to rising demand, relative to supply, in apartment-style products.

“As our market continues to return to pre-pandemic sales levels, it’s important to remember that we typically see fewer transactions occur in January,” said Guérette. “As higher commodity prices and a strong agricultural sector continue to support our economy, Saskatchewan remains resilient and well-positioned for stable demand in home ownership.”

Regional Highlights

Many regions across the province experienced a year-over-year decline in sales, apart from Moose Jaw and North Battleford. Inventory gains in Melfort, Prince Albert, Saskatoon and Yorkton were not enough to offset the declines in other regions, as inventory levels remain far below long-term trends.

While the months of supply have trended towards more balanced conditions across all regions outside of Moose Jaw and North Battleford, all other regions across the province continue to report months of supply lower than 10-year averages.

Price Trends

Year-over-year price gains ranged from a low of just under one per cent in Estevan to a high of over three per cent in Swift Current. Meanwhile, prices eased in Meadow Lake, Melfort, Regina, North Battleford, and Yorkton, with the largest year-over-year price decline occurring in North Battleford.

City of Regina

Regina reported 134 sales in January, slightly below long-term trends for the month. The dip in sales can be attributed to declines in detached activity and ongoing supply issues. With less than 300 new listings this month, January levels are at their lowest level since 2010. Additionally, the pullback in new listings ensured that inventory levels remained well below long-term averages, with much of the inventory decline being driven by homes priced below $300,000.

Regina reported a benchmark price of $312,200 in January, down one per cent compared to January 2022 and above the $291,300 reported in January 2021.

City of Saskatoon

Saskatoon reported 201 sales in January, relatively consistent with long-term trends for the month. While higher lending rates are impacting sales, a lack of new listings and low inventory levels also remain a challenge. New listings eased to 415 in January, the lowest level since 2008 and over 35 per cent below levels typically seen this time of year. As seen in other areas of the province, inventory declines have been mostly concentrated in the more affordable segment of the market.

Saskatoon reported a benchmark price of $366,000 in January, up nearly two per cent compared to January 2022 and above the $336,600 reported in January 2021.

Vacancy rates going down can lead to higher rental costs

Bank of Canada raises key interest rate for eighth time, to 4.5 per cent. What you need to know

The interest rate hikes are over — probably.

The Bank of Canada raised its key overnight lending rate for the eighth straight time Wednesday morning, but signalled its rate-hiking campaign could finally be over.

The central bank bumped the overnight rate up by 25 basis points — a quarter of a percentage point — to 4.5 per cent, just what markets had been expecting.

“If economic developments evolve broadly in line with the … outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases,” the Bank said in a news release announcing the 25-basis point increase.

The Bank also said previous hikes have been having their desired effect of slowing inflation by hitting consumer demand.

“There is growing evidence that restrictive monetary policy is slowing activity, especially household spending. Consumption growth has moderated from the first half of 2022 and housing market activity has declined substantially,” the Bank said.

“As the effects of interest rate increases continue to work through the economy, spending on consumer services and business investment are expected to slow. Meanwhile, weaker foreign demand will likely weigh on exports. This overall slowdown in activity will allow supply to catch up with demand,” the Bank predicted.

The Bank also said the Canadian economy likely grew by 3.6 per cent in 2022, slightly higher than it had forecast in October. It also predicts the Canadian economy will grow by just one per cent this year, and by two per cent in 2024

Despite evidence of a slowdown, the Bank justified Wednesday’s increase by pointing to continued high inflation. In December, the Consumer Price Index was 6.3 per cent higher than it was a year earlier. While that was down from 6.8 per cent in November — and a big drop from the 8.1 per cent seen in June — it’s still more than three times the Bank’s two per cent target for inflation.

“With persistent excess demand putting continued upward pressure on many prices, Governing Council decided to increase the policy interest rate by a further 25 basis points,” the Bank said.

The Bank also released its quarterly analysis of the state of the Canadian economy, and for the first time ever, published minutes of its internal debate that led to Wednesday’s decision.

In an attempt to get inflation under control, the Bank raised the overnight lending rate seven times in 2022, most recently bumping it by 50 basis points (half a percentage point) to 4.25 per cent in early December.

The overnight rate began last year at 0.25 per cent, where it had been since the Bank dropped it three times in one month in March 2020, as the global COVID-19 pandemic was declared.

The theory is that by making it more costly to borrow money, people will spend less, eventually driving prices down.

Source:

By Josh RubinBusiness Reporter

2022 was once again amazing year and we again owe it all to our wonderful clients. We were able to sell over $100,000,0000 worth of real estate in back to back years despite a shifting market.

We were able to be the lead agents on the Hudson Row project in Rosewood where we sold over 40 townhouse units in the development. We are very appreciative for all the developers that utilize our services, some that date back as far as the first year we were in real estate.

The brokerage has now grown to over 100 agents and staff heading into our 8th year as a company. We have office locations in Saskatoon, Regina and Battleford as we look for opportunities to expand and grow further in coming years. The Property Management division continues to grow, and we will continue to expand the portfolio of properties we are managing and seek opportunities for condominium, commercial and multi family management.

This brokerage began in 2015, with myself, a handful of agents and one full time staff. We had signed a 5 year lease on a space at Quebec Avenue. After a few short months we found ourselves having to try negotiate our way out of the lease so we could purchase a building. An early and expensive lesson about running a business. This allowed us to purchase 714 Duchess Street, which is still our head office today.

I think that's still what I love about this everyday. Each day will present new issues, new challenges in the market, constant changes and we have somehow been able to adapt throughout the years to grow to where we are today.