RED HOT HOUSING MARKET SEARING IN SASKATCHEWAN; CONDITIONS FORECAST TO CONTINUE TO YEAR’S END
– Significant price appreciations and strong demand will characterize the market through 2007 –
SASKATCHEWAN, July 5, 2007 – Intense demand, driven by the swell of in-migration of Saskatchewanians returning from prosperous Alberta, fuelled average house prices and market activity in Saskatchewan during the second quarter; the housing market is anticipated to continue at a similar tempo throughout 2007, according to a report released today by Royal LePage Real Estate Services.
Saskatchewan’s housing market led the country in highest average price appreciations, surpassing the typically frenetic market conditions of oil-rich Alberta. During the second quarter droves of buyers flocked east to Regina and Saskatoon where average house prices are considerably less than in the western provinces. Many buyers have returned home with sizeable equity and are now favouring the simpler life that Saskatchewan offers. Despite the rapid spike in average house prices, market activity has begun to stabilize at the end of the second quarter and is expected to continue at a slightly more temperate pace, albeit still very strong, for the remainder of the year.
The average house price in Regina is forecast to increase by 13.8 per cent to $150,000 by the end of 2007. Unit sales are projected to increase by 18.5 per cent to 3,500 units sold in 2007.
Regina’s booming job market and diversified economy will also continue to attract buyers. Employment in the natural resources sector including the production of oil, potash, uranium and agriculture are poised for steady growth, further strengthening consumer confidence in the economy and housing market.
“We’ve had a tremendous year so far, and all signs indicate healthy and robust conditions for the next six months. Our population will continue to grow, mainly due to the fact that compared to the rest of the country, Regina offers buyers an affordable standard of living, ideal for those looking to escape the burden of large or long-term mortgages,” said Mike Duggleby, manager, Royal LePage Regina Realty.
New to Regina’s housing landscape is the rapid growth in the condominium market. Due to their affordable prices, condominiums have become the favoured choice of first-time buyers entering the market, and despite new construction, demand is outstripping inventory.
Based on the surveyed markets in Regina, the average price of a detached bungalow increased by 42.4 per cent to $204,000, while the average price of a standard condominium rose by 25.2 per cent to $118,300, year-over-year. The average price of a standard two-storey home rose by 19 per cent to $181,917, year-over-year.
Added Duggleby: “Proactive media campaigns in the western provinces promoting Regina as a great place to live appear to be successful based on the strong market activity during the second quarter.”
In Regina North, detached bungalows experienced the largest appreciation, with the average price rising by 42.9 per cent to $195,000, followed by the average price of a standard condominium, which rose by 31.3 per cent to $111,600, year-over-year. Standard two-storey homes increased by 20 per cent to $163,000, year-over-year.
In Regina South, detached bungalows showed significant gains, rising by 42 per cent to $213,000, year-over-year. The average price of a standard two-storey home rose by 18.1 per cent to $200,833 while the average price of standard condominiums in the area rose by 47.1 per cent to $125,000 over the same period last year.
With the same fundamental conditions in tact as in Regina, market activity in Saskatoon was frenetic during the second quarter; with even more significant price appreciations recorded. Very limited supply, coupled with fierce demand drove prices up in all housing categories, with huge appreciations in the condominium sector.
“While strong demand dramatically pressured prices upwards for much of the second quarter, the market has begun to temper. Moving into the third quarter and onwards, we expect to see slightly fewer buyers, as first time buyers retract due to the erosion of affordability,” said Norm Fisher, sales manager, Royal LePage Saskatoon Real Estate. “However, our strong employment rates and abundance of job opportunities in diverse sectors like small business, sciences and construction will continue to keep the market buoyant and operating at conditions unparalleled to what we have ever experienced in recent years.”
Based on the surveyed markets in Saskatoon, the average price of a standard condominium rose by a dramatic 84.7 per cent to $205,000, followed by detached bungalows, which increased by 56 per cent to $281,250, year-over-year. The average price of a standard two-storey home rose by 55.2 per cent to $305,000, year-over-year.
The brisk activity and rising prices have also had a ripple effect into neighbouring areas. The typically slower market in Swift Currant has been invigorated by a spill over of buyers from Saskatoon.
Added Fisher: “During the second quarter increased demand drove listing periods down to mere days and stimulated aggressive multiple offer situations, conditions that are not typical of this market. In fact, in recent weeks, as many as 80 per cent of properties reported sold went above the asking price – by an average of $26,000.”
In Saskatoon North, the average price of a standard two-storey home rose by 48.8 per cent to $305,000, year-over-year. Detached bungalows rose by 50.5 per cent to $280,000, while the price of a standard condominium saw a huge price appreciation rising by 101.9 per cent to $210,000 – the highest price appreciation recorded in all housing types in Saskatoon in the second quarter.
In Saskatoon West, the average price of a standard two-storey home rose by 61.7 per cent to $270,000, while the average value of a detached bungalow also increased, rising by 58.1 per cent to $245,000, year-over-year.
In the East End, the average price of a detached bungalow rose by 59.8 per cent to $310,000, year-over-year. The average price for standard two-storey homes increased by 51.4 per cent to $330,000, from the same period last year.
In East Central, the price of a standard two-storey home rose by 60.7 per cent to $315,000 compared to last year, while the average price of a detached bungalow rose by 55.9 per cent to $290,000. Standard condominiums rose significantly by 80.2 per cent to $200,000.
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