A Look at Saskatoon Real Estate

The Canadian housing market is experiencing a correction. Whether conditions escalate remains to be seen. Still, the Bank of Canada’s path to policy rate normalization is weighing on the real estate industry. But while multiple housing markets – from major urban centres to rural communities – are experiencing a mixed bag of conditions, from immense growth to holding steady to declines. A case in point is the Saskatoon real estate market. How is the Saskatoon real estate market?

Prices in the Saskatoon housing market have crept up at a gradual pace amid a climate of high interest rates and strengthening demand.

In fact, despite the pandemic-era boom, values did not venture to the moon either. This explains why Saskatoon has remained one of Canada’s most affordable housing markets. These modest gains have attracted families from other provinces and immigrants, as average prices have allowed many households to achieve the dream of ownership.

So, how is the Saskatoon housing sector performing to kick off 2024?

Saskatoon Real Estate in 2024

Could the next 12 months be huge for the Saskatoon real estate market? If the early numbers are anything to go by, it could be a terrific time to buy a residential property in this Prairie city.

New data from the Saskatchewan Realtors Association (SRA) show that home sales surged at an annualized pace of 22 per cent, totalling 245 units. This was 16 per cent above the 10-year average.

As for prices, there was some easing in the Saskatoon housing sector. The benchmark price for a home slipped from $374,100 in December to $378,200 in January. That said, home prices did rise two per cent from the same time a year ago.

Supply has played a crucial role in the Saskatoon real estate market, with inventory levels far below the historical averages. New listings tumbled 26 per cent year-over-year and are close to 50 per cent below the decade average for this time of year. But new housing construction has started off the year rather well, with housing starts climbing 25 per cent year-over-year to 94 units, according to the Canada Mortgage and Housing Corporation.

Now, compared to the broader provincial real estate market, conditions are pretty similar. Home sales rose 24 per cent year-over-year and are 18 per cent above the decade average, while home prices were relatively unchanged at $319,600. Plus, housing stocks plunged by 18 per cent year-over-year and are 36 per cent below the long-term average.

“Higher lending rates have driven many purchasers to seek out more affordable products, resulting in further inventory declines in the more affordable segment of our market,” said SRA CEO Chris Guérette in a statement. “January failed to bring new listing relief to this area of our market, and prospective buyers can continue to expect tight market conditions when searching for more affordable properties.”

Will 2024 Change the Saskatoon Housing Market?

Following the modest market correction amid the Bank of Canada’s (BoC) inflation-busting efforts, housing affordability remains a key issue in the Canadian real estate sector. As first-time homebuyers struggle to navigate the turbulent housing industry, they are searching for affordable options. And one of these is the Saskatoon real estate market.

As the conventional five-year fixed mortgage rate continues to hover around five to six per cent and prices remain firmly above their pre-pandemic levels, households are trying to get the best bang for their buck. Saskatoon achieves this objective, and people are beginning to notice.

Last year, Saskatoon officials projected that the city had its largest year-over-year population gain since the Second World War, rising by more than 14,000 people from October 2022 to October 2023. The last time the urban centre experienced such growth was in 2012, when the population increased by 7,000.

“It wasn’t something that we particularly expected,” Saskatoon city planning and development director Lesley Anderson told Global News. “It’s not something that catches us off guard in terms of being able to deal with it, although those numbers were surprising.”

Because of this, city officials are determining if they have the residential units to accommodate such a sizeable jump in population levels. Considering that inventory levels are much below the long-term average, there will be a lot of catching up to do. The city council has already given the approval for a housing accelerator fund action plan to bolster residential infrastructure efforts.

With the national average home price up nearly eight per cent from a year ago to $660,000, prospective homebuyers are trying to stretch their home-buying dollars. As the annual inflation continues to run at a three per cent clip and mortgage rates add thousands of dollars extra a year to payments, families want options.

Sustaining the Momentum

For decades, Saskatoon has struggled to mirror its neighbours, whether Winnipeg or Calgary. But the post-crisis environment has been rather kind to the city, which leads to the question: Will Saskatoon sustain the trends of the last couple of years? Looking ahead to the rest of the year, prices are expected to rise two per cent to roughly $369,000. Because of low inventories, Saskatoon will be a seller’s market, and local real estate experts say that developers are having a tough time keeping up with demand, ongoing labour shortages and input price pressures.