Three Hot Prairie Real Estate Markets to Invest in

The Prairie real estate market stagnated for years, especially in Manitoba and Saskatchewan. Alberta enjoyed a robust housing industry, thanks to its two major urban centres – Edmonton and Calgary – and its energy sector. But everything changed a couple of years ago when a whole host of Prairie cities and towns posted meteoric gains.

But with rising interest rates and market uncertainty, is this still the case? While it might be too early to declare a downturn, the common theme in many Prairie markets is that prices continue to remain elevated, and sales activity has been riveting entertainment to watch.

So, what are currently the three hottest Prairie real estate markets to invest in today? Here are the cities that are doing well during the downturn in the broader Canadian housing market.

Three Hot Prairie Real Estate Markets to Invest In

Red Deer, Alberta

According to the Central Alberta Realtors Association (CARA), residential property sales in the Red Deer real estate market tumbled 10.6 per cent year-over-year, totalling 127 units. The disappointing performance in sales activity in October added to the year-to-date drop of nine per cent, with pullbacks concentrated in the detached and semi-detached markets. At the same time, home sales in Red Deer have outperformed levels seen before the coronavirus pandemic.

On the pricing front, the total residential average price surged at an annualized pace of 16.5 per cent to $373,833. So, while sales activity slowed, prices climbed as a result of smaller housing stockpiles.

Here is a breakdown of the four main property categories in Red Deer on a year-over-year basis:

• Detached: +16.2 per cent to $437,079
• Semi-Detached: +17 per cent to $317,583
• Townhome: +13.7 per cent to $210,086
• Apartment: +10.6 per cent to $191,318

Indeed, inventories have been lacklustre in the Albertan real estate market.

New residential listings advanced nearly seven per cent year-over-year to 177 units, and active listings plummeted close to 34 per cent in October to 287 units. The months of supply, which measures the number of months it would take to exhaust current inventories at the present rate of sales activity, crashed more than 26 per cent to 2.26.

New housing construction activity levels were relatively the same compared to a year ago. In October, there were 23 housing starts, according to the Canada Mortgage and Housing Corporation (CMHC). On a year-to-date basis, there were 169 housing starts.

Winnipeg, Manitoba

Data from the Winnipeg Regional Real Estate Board (WRREB) show that residential property sales in the Winnipeg real estate market climbed seven per cent, totalling 776 units in October. Historically, however, this level of sales activity was 12 per cent below the five-year average.

Despite the increase in property transactions, pricing statistics were mixed in October. Average prices went up about six per cent, but the various property categories recorded different numbers:

• Detached: +6 per cent to $377,189
• Attached: -1 per cent to $316,254
• Condominiums: -1 per cent to $260,898

“While our market region is sprinkled with snow as we begin the last quarter of 2023, it is uplifting to see so many increases over last October,” said Rena Prefontaine, 2023-2024 President of the Winnipeg Regional Real Estate Board, in a statement. “Not only were All MLS® total sales up, but MLS® sales for residential-detached homes were up 5% while condominium sales were up almost 20% over last October. Average prices declined slightly for condominiums and residential attached homes, but for the fourth consecutive month, average prices rose for residential-detached homes when compared to last year.”

Supplies have improved in the Winnipeg housing market, with local real estate association figures showing that active listings climbed ten per cent to 4,047 units.

That said, CMHC data show that new housing constructive volumes have slowed. In October, housing starts cratered by 78 per cent year-over-year to 157 units.

Saskatoon, Saskatchewan

The Saskatoon real estate market might be one of the healthiest in the entire country as it balances growth with housing affordability. The Saskatchewan Realtors Association (SRA) numbers potentially point to a housing market that other urban centres wish to emulate.

In October, residential property sales surged 20 per cent year-over-year, totalling 382 transactions. This was also 12 per cent above the long-term average for this time of the year.

Meanwhile, the benchmark price for a residential property in the Saskatoon real estate market rose slightly by 0.21 per cent month-over-month to $382,700. Compared to the same time a year ago, benchmark prices climbed close to four per cent. Additionally, there were price gains across all property types, ranging from one per cent for semi-detached properties to eight per cent for townhomes.

But much of the growth is being driven by a scarcity of supply. New listings dropped for the sixth consecutive month, resulting in the lowest October inventory levels since 2007. Plus, there were only two months of supply in the Saskatoon real estate market.

Can the Prairie Real Estate Market Sustain Its Growth?

Be it Saskatoon or Red Deer, the question is: Can the Prairies keep up? Some market analysts anticipate that segments of the Canadian real estate market that posted record-setting gains during the COVID-19 public health, such as Saskatoon and Winnipeg, would experience the sharpest downturn. So far, there has yet to be a crash or a notable decline in prices. For now, like Atlantic Canada, the Prairies are what might help the nation’s housing industry stay afloat in this rising-rate climate and slowing economy.