Sask. Housing market “cooling” as interest rates rise

A new report suggests that tight real estate supply conditions are supporting price increases in Saskatchewan while prices are falling in many cities across Canada.

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Higher interest rates are having a “cooling” effect on the Saskatchewan housing market, according to a new report from the Saskatchewan Realtors Association.

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The report, released Thursday, notes that sales for the month of July “regressed” to 1,439 units, which means an annual decline of 9 percent. However, the report is quick to point out that 2021 was a record year for sales and that 2022-to-date sales of nearly 10,000 units are still well above the county’s “long-term averages.”

New listings also declined, but the report notes that the “slip” in sales has outpaced the decline in new listings, leading the market into “more balanced conditions.”

CEO of the Association Chris Gerrett says the increases in interest rates have prompted buyers to look for more affordable options.

The challenge will be product availability in the lower price ranges in the market,” he said in the statement.

“Supply levels are improving compared to earlier in the year, however, the annual decrease in inventory has been driven by homes under $400,000.”

The report stated that supply conditions are still “tight”, noting “wWith less than five months to go, the market is still experiencing its toughest July conditions since 2009.”

The report states that tight supply conditions support price increases in Saskatchewan while prices are falling in many cities across Canada.

July’s “benchmark price” is listed at $335,100, which the report says is slightly higher than the previous month and more than five percent higher than July of 2021.

“Going forward, further rate hikes are expected as market inflation concerns persist,” Gerritt said in the statement.

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In Regina, 2,379 units were sold, year-to-date — an increase of one percent from “last year’s record pace.” According to the report, inventory levels in the city are 13 percent below last year’s levels.

Sales in Saskatoon have trended lower this month, adding to their year-to-date decline of nearly 11 percent.

“While sales have fallen, that’s relative to record highs and with more than 3,000 sales so far this year, levels are still 20 percent above long-term trends for the city,” the statement said.

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