SASKATCHEWAN, December 14, 2006 – Strong in-migration from the Western provinces lead to tight inventory levels in the major markets in Saskatchewan, causing average house prices to rise, year-over-year, according to a year-end report released today by Royal LePage Real Estate Services.
Low inventory levels continued to pressure prices upwards in Saskatoon, where buying activity remained brisk throughout the quarter. Accurately priced properties that showed well continued to attract multiple offers and often sold above list price, with the average time on the market falling to below 30 days.
Of the four markets examined in Saskatoon, the average price of a standard condominium experienced the greatest increase compared to other housing types surveyed, rising by 15.3 per cent to $124,000, year-over-year. Standard two-storey homes increased by 13.3 per cent, to $205,000, while the price of a detached bungalow rose by 14.2 per cent to $188,500, year-over-year.
Saskatoon has continued to experience an increase in in-migration – a population who is accounting for a large portion of the activity within the housing market. People have been moving to the city to take advantage of the affordable cost of living and excellent job opportunities, as many businesses in a variety of sectors are expanding.
“Saskatoon has experienced an increase in in-migration, and inventory has not been able to satisfy demand which has resulted in continued double-digit increases in average house prices,” said Norm Fisher, sales manager, Royal LePage Saskatoon Real Estate. “Moving into 2007 we should see some reprieve from the shortage of inventory as some current building projects are completed, helping to free up inventory for the resale market.”
Demand for condominiums has seen continued to grow in the fourth quarter, as an increasing number of entry-level purchasers have been turning to condominiums when they are unable to find a home that is affordable. Luxury homes priced above $300,000 have also seen an upswing in activity, largely attributable to out-of-province purchasers.
In Saskatoon North, the average price of a standard two-storey home rose by 14.0 per cent to $212,000, year-over-year. Detached bungalows rose by 13.4 per cent, to $195,000, while the price of a standard condominium rose by 14.3 per cent to $128,000 over the same period in 2005.
In Saskatoon West, the average price of a standard two-storey home rose by 13.4 per cent, to $178,000, while the average value of a detached bungalow also increased, rising by 13.5 per cent, year-over-year, to $164,000.
In the East End, the average price of a detached bungalow rose by 15.6 per cent, to $200,000, year-over-year. The average price for standard two-storey homes also increased, rising by 11.9 per cent from the same period last year to $225,000.
In East Central, the price of a standard two-storey home rose by 13.9 per cent to $205,000, while a detached bungalow rose by 14.0 per cent to $195,000, year-over-year. A standard condominium also appreciated by 16.5 per cent compared to the same period last year to $120,000
Of the markets examined in Regina, the average price of detached bungalows experienced the greatest increase compared to the other housing types surveyed, rising by 6.9 per cent to $150,375, year-over-year. Standard two-storey homes increased by 3.1 per cent, to $146,500, while the price of a standard condominium rose by 2.1 per cent to $96,500, year-over-year.
“Demand for all types of housing remained strong during the fourth quarter, as affordable interest rates and strong consumer confidence continued to drive buyers into the market, placing pressure on already tight inventory levels,” said Mike Duggleby, manager, Royal LePage Regina Realty, Regina. “In some cases, we have seen the lack of available inventory result in purchasers deciding to wait until the new year to make a purchase as they have become frustrated by the limited supply.”
Activity in the upper end of the market has seen an upswing of activity in the fourth quarter, driven by purchasers from the Western provinces, seeking out a lower cost of living and the excellent employment opportunities that the city offers. Windsor Park and Wascana are popular areas located in the southeast of the city, while the bedroom communities of Emerald Park and White City have seen strong activity in the fourth quarter.
Regina’s housing market is expected to maintain its strength throughout the upcoming year, with tight inventory levels limiting the number of units sold. For the year ahead, purchasers can expect average property prices to rise by 5.9 per cent to $144,000, according to the 2007 Royal LePage Market Survey Forecast, while the number of property transactions is expected to increase by 1.0 per cent to 2, 970 units sold.
In 2007, move-up buyers are expected to account for a larger portion of activity than they have in previous years. Out-of-province buyers are expected to remain active, sustaining strong activity within the upper end of the market.
Added Duggleby: “New developments in the southwest and the northwest of the city should help to relieve some of the pressure on inventory levels next year, however, seller’s market conditions are expected to persist for all of 2007.”
In Regina North, the average price of a standard two-storey home remained stable, year-over-year, at $132,000, while the average price of a detached bungalow increased by 6.8 per cent to $146,750, while standard condominiums remained steady at $85,000, year-over-year.
In Regina South, standard two-storey homes showed the largest gains, rising by 5.7 per cent, year-over-year, to $161,000. The average price of a detached bungalow rose by 3.2 per cent, to $154,000, year-over-year. The average price of standard condominiums in the area rose by 3.8 per cent to $108,000, compared to the same period last year.