Experts and economists are expecting a continued cooling of Canada’s housing market in 2023, but Saskatoon is expecting to be a bit of an outlier.
High mortgage rates, low inventory and uncertainty about whether the Bank of Canada will raise interest rates further are cited as reasons for the anticipated cooling across the country.
Re/Max Canada gave its housing outlook for the new year with the expectation for prices to drop across many cities in the country, but in Saskatoon, prices are expected to rise up to three per cent.
Ashley Turner with Century 21 in Saskatoon says the current state of the housing market is very tight.
“It’s tight across the board, I checked this morning, we’re at 825 active listings in the city,” Turner said.
That’s a low number, she said, adding that the number of listings under $500,000 is lower still, making affordable inventory hard to find.
Turner said it will take relaxed interest rates and the building of homes for purchasers rather than renters to loosen the market.
She said she’s seen frustration from buyers, noting that good deals go quickly.
“There are quite a few people staying put because they can’t find that next house that they really want to be in.”
Turner expects the market in 2023 for Saskatoon to be driven by first-time homebuyers and immigrants.
Chris Guérette with the Saskatchewan Realtors’ Association says there’s pressure on the current inventory right now, adding that she also expects housing prices to increase in the future.
“We have a growth plan to 2030 – if we wanted to keep pace with that we needed to build between 94,000 and 144,000 units in the next seven years,” Guérette said.
She said that’s a significant number, noting that in the 30-year period starting in 1990, a total of 96,000 units were built.
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Guérette said in order to meet that goal, there would need to be collaboration between several organizations and governments.
She noted that the demand is there, but the supply is lacking.
“We’re of the opinion that we really have to look at supply.”
She said aspects like building more homes, densifying neighbourhoods and creating opportunities for homeowners to offer rental space for extra income need to be looked at.
Guérette expects the province to fare better than many other parts of Canada, citing economic activity and immigration in Saskatchewan.
Nicole Burgess with the Saskatoon and Region Home Builders’ Association says the province is facing some challenging times.
“So what we’ve seen is a pullback from construction within our city as buyers really wait and see what’s the interest rate environment,” Burgess said.
She said it’s concerning to see the lack of housing options in the city with the projections for population growth – there’s not enough housing to go around, she said.
Burgess suggested the province needs to approach the housing crisis from a policy standpoint.
“What we’ve noticed is that within the last quarter, about 48 per cent of the current inventory under construction is actually slated for rental.”
She said some builders are moving into the renovation world as well.
Burgess said potential buyers are getting pushed to the sidelines or getting priced out of the market, which in turn is putting pressure on the rental market.
She said there is a light at the end of the tunnel, though, as she expects things to pick up once interest rates stabilize and buyer confidence returns. However, she noted the housing supply will still need to be addressed.
— with files from Global News’ Anne Gaviola, Rachel Gilmore and Craig Lord
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