Saskatoon market has under 1,000 houses listed after interest rate spike, labour shortages

For the first time in a decade, Saskatoon has fewer than 1,000 homes listed for sale in the city.

“I think it’s due to increasing interest rates,” said real estate agent Ashley Turner at Century 21 Fusion. “I think that there’s been a bit of a pullback in new builds as well just with labour shortages, things like that and just due to rising interest rates, I think it’s all relative.”

A Saskatoon and Region Home Builders’ Association report showed a nearly 50 per cent decline in housing sales in the third quarter of 2022 in comparison to last year. There were only 257 sales made in the third quarter in Saskatoon.

“Deals collapsed as multiple buyers were not able to secure financing, even those preapproved by the banks. Lenders were not anticipating interest rates to rise as fast as they did, forcing them out of honouring preapprovals and mortgage rates commitments,” said the report.

This can be frustrating for current buyers and limits price ranges within the market.

The city is particularly lacking inventory of listings that are under $500,000.

“It just really takes away that buying power and makes it competitive for sure,” said Turner.

Houses under $500,000 are typically attractive to single families and first-time home buyers.

3:41 Breaking down Saskatoon’s housing market in Real Estate YXE

Although many of the comparisons seem negative, agents and the Home Builders’ Association said it could be worse.

“Our market does seem to be resilient here in Saskatoon with our economy being so good, so we are looking forward to seeing what 2023 brings,” Turner said.

The Home Builders’ Association report said “media outlets reporting massive pricing drops in markets like Vancouver and Toronto negatively affect potential homebuyers in Saskatoon and area which has not seen the same decline. Furthermore, affordability is key, and Saskatoon is affordable.”

They say the average single-family home in Saskatoon this year is $526,166 while the same homes in Toronto or Vancouver are sitting between $1.5 and $3 million.

The Bank of Canada said that in order for inflation to be controlled, the economy must be forced to slow down. They predict interest rates to reach a record high if rate hikes continue into 2023.