Saskatchewan to lead nation for economic growth: RBC

Saskatchewan to Lead Nation for Economic Growth: RBC EconomistHistorically high commodity prices will push Saskatchewan to a leading growth position amongst Canadian provinces this year, according to RBC economist Paul Ferley.


Speaking to a group of RBC clients in Saskatoon on Friday, Ferley noted that a “wide range of commodities” are experiencing higher prices. He’s predicting that uranium, potash, wheat and oil production will push Saskatchewan’s economy forward by 3.5 percent in 2008, and 3.25 percent in 2009, compared to national growth rates of 1.5 percent and 2.5% respectively.


The Saskatchewan economy was the subject of much speculation in 2007, but ultimately underperformed on the most bullish predictions, which had forecast real GDP growth between 4 and 4.8 percent. Saskatchewan’s real GDP growth came in at 2.8 percent, just slightly above the national average. However, Saskatchewan’s nominal GDP growth through 2007 was exceptionally strong at 11.4 percent, topping all provinces except Newfoundland and Labrador. Real GDP measures changes in production, while nominal GDP measures the actual dollar value of the economy. You might say that we worked 2.8% harder, but earned 11.4% more.


Read the Saskatoon Star Phoenix story by Wendy Gillis here.


Read also: Saskatchewan Economy Underperforms on Expectations

Read also: The Rest of the Economic Growth Story

Read also: Saskatchewan Could Become an Embarrassment of Riches: RBC

See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon and Regina real estate to follow Calgary and Edmonton: RBC

In the latest “Canadian City Trends” report, released last week by RBC Economics, economist Amy Goldbloom makes the case for a “cooling” but fairly stable Canadian real estate market. Following six years of double-digit gains, sales activity is starting to moderate and listings are growing in most major cities causing sellers to “lose some bargaining power.” According to Goldbloom, “the risk of significant price declines is still low, and Canada’s housing market is expected to eke out modest price gains in 2008.”

Goldbloom does make some comments about western markets, and addresses Saskatchewan’s situation head on.


“The slowdown is not shared evenly among cities. The markets that soared well above their underlying economic fundamentals are the very ones with the most downside potential. Calgary and Edmonton have moved from chart-toppers to the bottom-of-the-heap in only a matter of months on a range of key housing market indicators, including house prices and sales.


“Saskatchewan jumped into the spotlight in 2007 as a commodity-led expansion attracted an influx of migrants and led to a major housing boom. Regina and Saskatoon continue to clock year-over-year price gains that are several multiples above the pace of their local wage growth. This lends evidence that the current momentum is unsustainable, with a similar fate to Alberta’s likely for both of these cities within a years time.”


Goldbloom made similar comments about Saskatoon in October of 2007 when she said Saskatoon homes were overvalued and “out of whack with the underlying fundamentals.”


Read the RBC City Trends report here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Housing affordability slides further in Saskatchewan: RBC

“Saskatchewan is the new Alberta…,” according to RBC’s quarterly Housing Affordability report released yesterday. The catchy subtitle goes on to ask the question, “but for how long?”

“Saskatchewan now holds the top spot on growth across all key housing indicators including housing starts, house prices, residential building permits, and re-sale activity… The major erosion of affordability that has occurred over the last

year should gradually take a bite out of current momentum over the coming year.”

RBC measures the percentage of pre-tax income required to service mortgage debt on four popular types of housing. Here’s a quick look at how affordability has been impacted in our province between the fourth quarter of 2006 and the fourth quarter of 2007, the latest numbers this report examines.

Detached bungalows have gone from 31% of income to 40.4% of income.

Standard two-storeys have gone from 33.8% of income to 42.3% of income.

Standard townhouses have gone from 24.8% of income to 34.2% of income.

Standard condos have gone from 19.9% of income to 26.2% of income.

Lower housing prices in Calgary, measured against high increases in Saskatchewan have leveled the playing field between the two areas over the last year. You’ll now pay an equal portion of income to live in either Saskatchewan, or Calgary.

“Nationwide housing affordability deteriorated in every consecutive quarter throughout 2007 to end up at its most unaffordable level since the housing bubble peaked in 1990… Only Alberta bucked the trend in the latest quarter.”

RBC is predicting improved affordability across most markets in 2008, largely driven by “falling mortgage rates, cooler forecast house price gains and decent income growth.”

Read RBC’s Housing Affordability Report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Affordability to stabilize despite further increases in Sask house prices: RBC

Housing affordability is expected to improve in most Canadian provinces in 2008, but Saskatchewan is not among them according to the most recent Housing Affordability study just released by RBC Economics.


Following a year of record deterioration in housing affordability, the possibility of declining interest rates is the only hope which could move Saskatchewan into “stable” territory where the percentage of income used to service homeownership costs is concerned.


Recent reports released by RBC during 2007 characterized house prices in Saskatchewan as “considerably out of whack with the underlying fundamentals.” Apparently, the “fundamentals” are less important than we might have thought. RBC is predicting some fairly significant price growth for this area in 2008.


“In 2008, we expect softer, but still elevated conditions. Price gains should moderate from the 30% range down to somewhere in the 15% range. Unlike every other province where housing starts are expected to decline and affordability conditions to improve, Saskatchewan should actually see a modest increase in housing starts and only stabilization in affordability rather than an outright improvement.”


Read the most recent RBC Housing Affordability study here

Read also: Saskatchewan real estate on fire: TD Economics

Read also: Is Saskatoon real estate overvalued? Another economist says yes

Read also: Saskatoon and Edmonton homes most overvalued: Scotiabank economist

Read also: Worst quarterly deterioration of housing affordability on record for Sask


I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatchewan could become an embarrassment of riches: RBC

Saskatchewan could become an embarrassment of riches: RBC

In their latest Provincial Outlook, RBC has downgraded projections for economic growth in Saskatchewan over 2008 and 2009, but still expects the provincial economy to perform better than all other provinces, except Alberta. In spite of this short-term downgrade, RBC does seem particularly bullish on the potential for Saskatchewan’s future providing that “the risks of overheated housing and commodity cycles” are properly managed.


RBC economists point to a heated Saskatchewan economy through 2007, which was largely driven by a “sharp reversal in net-migration outflows to inflows, the resulting pick-up in housing markets, strength in job gains, and high commodity prices.”


However, RBC warns that “cracks are appearing” in Saskatchewan’s economy. Strained housing affordability that has pushed into record territory will crimp housing demand going forward because robust price gains are considerably out of whack with underlying fundamentals.”


“However, a variety of capital investments will support the non-residential sector… If Saskatchewan plays its cards right, then its early fortunes could become an embarrassment of riches for a small population through the triple play of diamond mining, renewed interest in developing its rich uranium deposits and a quickening pace of development in the immensely rich but challenging Bakken formation thanks to high oil prices and better technology… This offers Alberta-style future economic potential for a 70% smaller population, but requires managing the risks of overheated housing and commodity cycles.”


Read the RBC Provincial Outlook here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate