The mortgage stress test and higher interest rates are two factors having a negative effect on Saskatoon’s housing market, according to a new survey.
Norm Fisher, broker and owner of Royal LePage Vidorra in Saskatoon, said high inventory levels are also impacting the market.
“High levels of inventory coupled with a significant decline in demand have led to moderate decreases in the region’s home prices,” Fisher said in a statement.
The median price of a two-storey home fell by 0.4 per cent to $407,200 in the fourth quarter of 2018, according to the Royal LePage house price survey.
The median price of a bungalow dropped 3.5 per cent to $330,600 from a year ago.
No figures were released for townhouse or condos.
“The increased costs of financing a home have also contributed to the slowdown in the Saskatoon real estate market,” Fisher said.
“The stress test that came into effect in January of 2018 along with interest rate increases have made it tough for first-time homebuyers.”
Fisher said the slump in resources is also affecting the market.
“As our provincial economy heavily relies on mineral extraction, uncertainty regarding employment in the oil and uranium industries is affecting homebuyers’ confidence.”
The Canadian Mortgage and Housing Corporation is forecasting stabilization and some growth in home sales for 2019, with values rebounding.
CMHC said a key risk to price recovery would be a decline in employment, income, or population growth.