Saskatoon’s housing market is gaining momentum, according to a new report from Royal LePage.
The fourth-quarter report for 2019 found that the median price decreased by one per cent year-over-year to $368,954 due to first-time homebuyers.
“We’re seeing an increased level of interest in entry-level homes,” said Norm Fisher, broker and owner of Royal LePage Vidorra in Saskatoon.
“The first-time buyer market has picked up, which skewed median prices downward.”
The median price of a standard two-storey home decreased 2.5 per cent year-over-year to $392,517.
The median price of a bungalow increased 1.3 per cent year-over-year to $338,345 during the same period.
Fisher said consumer confidence in the market is increasing due to higher wages and lower unemployment rates.
“Incomes are rising and mortgage delinquencies are falling,” Fisher said in a statement.
“There are strong indicators for an improving Saskatoon housing market in 2020, with modest price gains around one per cent, at best.”
What could also help the market in 2020 is a change in the mortgage stress test, said Royal LePage president and CEO, Phil Soper.
“The federal government has signalled that changes could come to the mortgage stress test mechanism in 2020,” Soper said.
“The stress test pushed people out of real estate markets across Canada temporarily. For the most part, buyers have adjusted, yet it still represents a significant hurdle as families pursue the dream of owning their own home.”
Soper added the stress test is felt differently in different parts of the country and housing policies need to vary from region to region to reflect varied economies.
Under the mortgage stress test, federally regulated financial institutions are required to vet applicants for uninsured mortgages by using a minimum qualifying rate equal to the greater of the Bank of Canada’s five-year benchmark rate or their contractual rate plus two percentage points.
The rules effectively reduce the size of the mortgage Canadians will be able to take on given a certain down payment and income.