A new report from the Canadian Mortgage and Housing Corporation (CMHC) shows Saskatchewan’s largest cities are moving in opposite directions when it comes to the health of their housing markets.
This comes as both Regina and Saskatoon have seen slight increases in home prices.
The average price of a home in Regina rose by about two per cent from the summer to the fall.
“Part of that upwards price movement in the third quarter was due to the fact that sales have been so strong since June,” said CMHC senior economic analyst Taylor Pardy.
With prices increasing, Pardy and economists at CMHC are keeping a close eye on the Queen City.
In its quarterly housing market assessment, the Crown corporation moved Regina’s market to a moderate level of vulnerability.
Regina was listed at low in the previous quarter which ended in September.
Pardy said the jump is partly due to overvaluation of properties given economic circumstances in the city like people having less disposable income.
Meanwhile, Saskatoon’s market remains in a low degree of vulnerability.
It came as a small surprise to the CMHC given the economic effects of the pandemic.
“It made us more inclined to believe that the risks were to the downside. So the strong resale activity that we saw in the third quarter was a big surprise,” senior economic analyst Goodson Mwale said.
He added Saskatoon is seeing the majority of home sales valued between $150,000 and $400,000.
Mwale said there has been a 4.9-per cent increase in the number of people aged 25-44 employed in the city compared to the same quarter last year.
That combined with low interest rates have many people looking to purchase their first home or move into a slightly bigger one.
The activity in the market has also resulted in prices increasing about five per cent year-over-year and has Saskatoon moving from a buyers’ market to a more balanced one.
Mwale added there is also evidence of overvaluation in Saskatoon because of higher prices, but not enough to trigger a higher state of vulnerability.
A Saskatoon real estate broker said people who have seen the value in their home decrease over the past five years might look to list it over the coming months.
“I think as prices rise, more of those will trickle back onto the market, and that will probably help to keep prices from getting out of control,” Norm Fisher told Global News.
He added that he’s seen a lot of demand for single family homes on both sides of the city and that increasing that inventory would also help the city’s market.