Detached bungalow prices continued to rise year-over-year, increasing by 3.2 per cent to $363,750. Standard two-storey homes also continued to appreciate, rising by 2.5 per cent to $393,500. Standard condominiums witnessed the smallest increase, but still rose by 1.4 per cent to rest at $265,000.
“An increase in new housing inventory has allowed supply to start to catch up to the strong demand we’ve seen over the past few years,” said Norm Fisher, Broker, Royal LePage Saskatoon. “The rapid price appreciation we have become accustomed to is starting to level off, but there is still not enough supply in key market segments to completely stem the price growth.”
According to Fisher, inventory levels have gone up this quarter, especially in the condo category. However, he doesn’t expect the increased inventory to have a dampening effect on house prices because of the strong local economy and continued low interest rates.
“Interestingly, the overall number of homes changing hands has stayed relatively steady compared to this quarter last year, but the type of homes that buyers are purchasing is different. Sales of detached bungalows and condos are actually lower than last year, while sales of standard two-storey homes have increased,” added Fisher. “The robust demand for two-storey homes positions homeowners with these properties to sell quickly and on good terms.”
Fisher suggested that in the current market new builds are more affordable than the resale category because of a supply imbalance. “Because there are fewer homes available, sellers of previously owned homes have good clout and are able to turnover their homes quite quickly.”
Nationally, most regions showed healthy year-over-year price growth, with the average price of a home in Canada rising between 2.5 per cent and 5.4 per cent. In the first quarter, the average price of a two-storey home increased 5.4 per cent to $428,943, while detached bungalows rose 4.4 per cent year-over-year to $380,765. Standard condominiums posted slightly lower gains of 2.5 per cent to $252,174.
“With the slightest trace of a weather recovery in most parts of the country, we are now finally seeing the arrival of housing inventory. This, combined with pent-up demand following a particularly long and harsh winter is setting the stage for an exceptionally robust spring 2014 market,” said Phil Soper, President, Royal LePage. “This is good news for buyers, as the price spikes we have seen in a number of cities will be alleviated by this additional supply.”
“With a number of supportive economic factors in place, the country’s healthy real estate market continues to display its strength,” added Soper. “The federal government is heading towards a balanced budget for the first time in over six years, while all signs point to a continued low interest rate environment. Moreover, the strengthening global economy and a weaker Canadian dollar are fueling demand for Canadian exports and reducing dependence on the household sector to sustain our economic success.”