Saskatchewan economy underperforms on expectations
Statistics Canada released its Gross Domestic Product numbers yesterday which show that the Saskatchewan economy underperformed on expectations and forecasts of RBC Economics, CMHC, and the Conference Board of Canada, all of which estimated higher growth of between 4% and 4.8% for Saskatchewan in 2007.
According to the report, Saskatchewan’s economy grew by 2.8% through 2007, just a smidge higher than the national average of 2.7% and well below the other western provinces, which saw growth ranging from 3.1% to 3.3%.
Doug Elliot of Sasktrends Monitor told the Star Phoenix that Statistics Canada’s numbers are a more accurate reflection of the provincial economy than those of private sector economists.
“I think the Conference Board (of Canada) and all of the bank (economists) have been overstating the strength of Saskatchewan’s economy.
“We’re doing fairly well, but we’re not this powerhouse that everybody seems to think we are.”
Hmmmm?
Read the Star Phoenix coverage here.
Read the StatsCan report here.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
179 comments so far. We'd love to hear your thoughts.
May 12th, 2009 at 2:25 PM
Well, I think this is a more realistic overview of Saskatchewan’s current state of affairs. And when they say other Western Provinces, I’m assuming 3.1% for B.C and 3.3% for Alberta? Anyone agree with that? Secondly if Alberta’s economy is stronger why are prices on the decline and were on the way up? hmmmm…..
Saskatchewan economy was around the Canadian average growth but there has/is excessive growth in real estate prices, does that make any sense???????????? hmmmmmmm once again…….
May 12th, 2009 at 2:27 PM
And by the way the 3.3% increase is a much much larger “real” number than Sask’s because they of course have a much larger economy to begin with. I wonder what the differences in actual dollars really is??
May 12th, 2009 at 2:27 PM
Ooh burn, economic growth lower than all other Western Provinces and barely (0.1%) above average!? Maybe this will make housing affordable.
Probably not, even if Stats Canada says our economy is not growing as much as the rest of Western Canada, everyone in Saskatoon will point out all the new stores in Stonebridge by the huge new Walmart and assume we must be booming, I mean it’s almost half as big as Ikea (which we don’t have). Global news (which inflames stories to make them exciting regularily) told me so (about the boom). It must be a Statistics Canada conspiracy, because some guy in Ottawa cares so much about Saskatoon, he’s trying to make up that our economy is not growing much, and probably the same guy who made up our high crime and sexual assault rate… He must be born in Winnipeg?
Unfortunately, people elsewhere in the country will say: Wait, pay more to buy a house in a slower economy, with high crime and lower wages?!
And that’s the kicker. Conspiracy theories sound stupid and no one but us believes them.
May 12th, 2009 at 2:28 PM
Also, Manitoba beat us at 3.3% growth (the place next door with the super cheap housing and slightly lower crime) http://www.statcan.ca/Daily/English/080428/d080428a.htm
May 12th, 2009 at 2:28 PM
Thanks Norm, always interesting stories, didn’t see this on the cbc website earlier today, guess you beat them to it. I wasn’t that surprised by still growing slower than Alberta, but behind Manitoba and BC? I thought BC just had pretty beaches and nice hiking and skiing. Apparently there’s a good economy there too. Not sure what Manitoba even has to beat us in? Is that Falcon Beach show that popular?
May 12th, 2009 at 2:29 PM
Also thought this was interesting “The Saskatchewan economy increased 2.8%, rebounding from a drop in 2006.” So where’s Saskaboom? The economy dropped in 2006 (when even Manitoba gained 3.2%)?! And its rebound for 2007 is less than everyone else in Western Canada’s normal growth? Seriously read:
http://www.statcan.ca/Daily/English/080428/d080428a.htm
Apparently, booming potash and oil is enough to make us grow almost as much as the rest of Western Canada!
May 12th, 2009 at 2:30 PM
I’m hearing for sale signs going up in Saskatoon at the moment and I’m currently in Fort McMurray!! :-0
May 12th, 2009 at 2:30 PM
Oh just wait, I should buy right now, because if I don’t I will be priced out of the Saskatoon market!! I think I can qualify for a 40 year mortgage!!
May 12th, 2009 at 2:30 PM
I’m thinking of moving to Nunavut.
I hear they’re having a boom.
May 12th, 2009 at 2:31 PM
It would seem that no matter the economic times, good, bad, boom, bust or just lukewarm, there will be negativity, bitter feelings, and sarcastic blog comments.
May 12th, 2009 at 2:32 PM
Mike, I think the comments are based on everyone here being priced out of a home at home, and now seeing that evidence points out that our economy actually went from crummy (2006) to mediocre (2007) and neither is justification for a 50% price increase in 2007. I think it’s funnier that everyone keeps talking about a boom when apparently other than people getting gouged on house prices, there wasn’t one.
Regardless of fundamentals, there will always be those speculators and boosters calling a boom, and criticizing the skeptics for being negative. As Jim pointed out I’m sure everyone in Saskatoon will argue with these stats too.
May 12th, 2009 at 2:33 PM
I don’ think it takes a radical approach to realize the information in this report.
Private sector economists will always prove themselves to be exactly that: A bunch of rich people trying to pump.
Let’s just drop the whole guise that people who are that money obsessed have any interest other than their own.
You only had to look around. But of course some people just get too offended when they’re accused of being so short sighted.
By the way, Manitoba is great and so long as the greed is fended off in time, it will remain great. You can probably count on that happening in municipalities shortly.
Saskatchewan is now yet another gleaming example of how greed fueled apathy re branded as an economic ideal screws society as a whole.
May 12th, 2009 at 2:34 PM
“our economy actually went from crummy (2006) to mediocre (2007) and neither is justification for a 50% price increase in 2007. I think it’s funnier that everyone keeps talking about a boom when apparently other than people getting gouged on house prices, there wasn’t one.”
Of course there wasn’t one in 2007. As that famous article said: “it hasn’t even begun yet.”
I view house prices as a speculative indicator of what is actually going on. Much like stocks, if we hear that company X is on the verge of creating a breakthrough widget, no on sits around and waits for the widget. They invest on the news. They may even sell on the actual event.
The city of saskatoon website (and I can’t find that actual link; I’m looking) says there will be 40,000 migrating here over the next 2 years.
That sounds like it would keep demand high.
May 12th, 2009 at 2:34 PM
Of course there wasn’t a boom in 2007? Dude, Do you ever watch the news? Or talk to people here? All I’ve heard about for the past 2 years is the boom and apparently it was made up. I completely agree with other guys above, people in Saskatoon just can’t face they are in last place in the West. People here are always telling me how the population is like 250,000 or 300,000. Stats Can, via the bench website, says the population in 2006 was 202,000 up from 196,000 in 2001. Do you really think we’re going to add 40,000 more people in 2 years?
May 12th, 2009 at 2:35 PM
Nope, 400 people maybe. Who’s going to move to Saskatoon instead of Alberta, where you definitely make more money (base), always get offered overtime (hardly ever get offered overtime in Sask)and houses are about par? I don’t believe that to many people will be immigrating and now people (i.e university graduates) will begin leaving again, just when wages were on the increase, but now they have not increased enough. And yes stocks are speculative, but lately how many people have been losing their shirts to stocks and I see the problem happening in Saskatoon to people that have bought real estate lately.
May 12th, 2009 at 2:36 PM
I have no idea. That’s just what a mortgage person told me at a bank.
But, we’re around 233,000 now I believe, up from your 202,000 (2006) quote. So that’s 30,000 in a couple of years. So could we go up 40,000 in 2 more years? (I have no idea if that number is in any way accurate.) If there’s demand, if there’s jobs. Obviously, there wasn’t in 2007, but I don’t remember anyone saying there would be. “The boom hasn’t even started yet” are the words I kept hearing. Yes, the housing boom definitely was in effect. But why? Why did walmart build it’s biggest store in the west in Saskatoon? Does it do any kind of research on this stuff?
Question: If you somehow knew the demand for gold is going to go up in 2 years, would you buy it today or wait 2 years?
May 12th, 2009 at 2:36 PM
I found this interesting.
http://www.gdi-solutions.com/fdi/2007future.htm#winners
They list Saskatoon #1 of Top 5 ‘Best Economic Potential’ ‘Cities of the Future’ of small cities in North America.
And it’s ranked #10 in the overall Top 10 of all categories.
All 108 nominees were scored by an independent panel on over 60 facts about their areas for the following 7 selection factors:
* Best economic potential
* Most cost effective
* Best human resources
* Best quality of life
* Best infrastructure
* Most business friendly
* Best FDI promotion
This being said, I still think in the short term, there may be a large drop in house prices.
May 12th, 2009 at 2:37 PM
David, good to see you’re basing your opinion on what the person telling you to get a mortage told you…
So the City of Saskatoon states its population to 208,300 (estimated as of Dec 31, 2007 a couple months ago), Statistics Canada, May 2006 2006 said 202,340 (“most recent census was on May 16, 2006″). That is almost 6,000 in over a year and a half including the boom of 2007, so about 4,000 per year (albeit not from the same source, as Statistics Canada is kind of the gold standard but we have to wait till 2011 to find out the actual pop is 212,000 by then or something). So no 40,000 … And everyone said we were in a boom in 2007. Seriously, a year ago, anyone you asked knew about the “boom” at the time. Sure we heard more was to come, but everyone said last year was a boom, they even nick named Saskaboom a couple years ago. Apparently followed up by a loss of 0.4% one year and a gain of 2.8% the next year.
And Walmart? You’re basing your potential boom on Walmart building a big store. Come on. There is a lot of space out there. It’s a new store, they’re always getting bigger. Rumour has it Humboldt pop. 5,000 ish is getting a new Walmart. I’m sure the next new one on the outskirts of Calgary or Winnipeg or where ever will be bigger.
We’ve got Stats Canada, and even the City of Saskatoon, showing that your numbers are way out of whack, and the guy who gave you a mortage saying 40,000 new people(ten times the 4,000 over the last year, 7X 6,000 over year and a half) will move here in the next 2 years!? Think he was maybe a bit biased? Did the guy who sold you your car (e.g. Ford Taurus) tell you it was a luxury sedan and would become the coolest car by next year? Even the Hyundai guy will tell you that!
http://www.city.saskatoon.sk.ca/org/quick_facts/index.asp
http://www12.statcan.ca/english/census06/data/popdwell/Table.cfm?T=301&S=3&O=D
http://www12.statcan.ca/english/census/index.cfm
May 12th, 2009 at 2:37 PM
David,
April 23, 2007 fDi press release on your study
http://www.gdi-solutions.com/fdi/2007future.htm#winners
So if prices have went up 50% in the last year, think that changes your cost effectiveness?
May 12th, 2009 at 2:37 PM
wow you guys are right!It must have been a few key private sector economists and the media that caused all the real estate is saskatchewan to skyrocket.wow people are really going to feel stupid for buying a house a year from now…..
Back to reality people,people want to live in a smaller city like saskatoon.look at all the resources saskatchewan has oil,potash,uranium,biofuels.Saskatchewan is well suited for a boom thats why we re in the situation we are.Prices will go down abit but don t fool yourself into thinking this is a false boom caused by the media and investers.
but what do I know..time will tell.
May 12th, 2009 at 2:39 PM
“Of course there wasn’t a boom in 2007? Dude, Do you ever watch the news? Or talk to people here? All I’ve heard about for the past 2 years is the boom and apparently it was made up.”–dan
I think perhaps you’ve been talking to the wrong people.
That Globe and Mail of april 12 quoted Mr. Isaac, an energy billionaire who said:
“But the boom, Mr. Isaac said, hasn’t even really started. “People are talking about it in the present tense – but it’s not even here yet,” Mr. Isaac said. “The boom is still coming.”
I don’t know why people were talking about the economic boom as if it was happening last year. There was a real estate boom which may well be a bubble, but the economic boom, I don’t think anyone should have been saying it arrived in 2007. It is still coming.
When people kept saying Saskatachewn is the new Alberta, maybe what they fail to see is that it took alberta decades to become alberta.
May 12th, 2009 at 2:39 PM
“David, good to see you’re basing your opinion on what the person telling you to get a mortage told you…”
I bought a year ago. I was just getting a home equity loan. So they weren’t selling me anything.
Jim, I am looking at an rbc economic indatator chart of “prairie migration” showing Saskatchewan, manitoba and alberta. It indicates from 2005 to mid 2007 Saskatchewan has had about 28,000 migrate into our province, and then, from mid 2007 to 2008, about 8000 left.
Similarly, from mid 2006 to mid 2007, alberta had about 30,000 people leave.
I’ll find the link.
May 12th, 2009 at 2:41 PM
So to say I was talking to the wrong people, that’s why every media outlet has been leading off with stories of Saskaboom for the last couple of years. And Saskatoon may some day become the new Alberta, but its house prices took a year to go from no where to Alberta level…
And CW, there are solid fundamentals underlying our economy, but as of yet, hasn’t resulted in actual improvement in the economy, other than everyone’s house getting valuable all of a sudden.
May 12th, 2009 at 2:42 PM
http://www.rbc.com/economics/market/pdf/provfcst.pdf
page 3 of this link.
As well, the “city of saskatoon population projection 2006-2011″ was probably conducted in maybe 2005. Back then, no one forsaw what would happen.
They write: “The total population for Saskatoon is 222,717 for 2006, and 236,842 for 2011.”
And yes, had things stayed the same, those numbers may have been correct.
http://www.city.saskatoon.sk.ca/org/city_planning/resources/population/population_2006-2011.pdf
May 12th, 2009 at 2:42 PM
David, now you’re just dropping random numbers. You said Saskatoon had 230,000 up from 202,000. It’s more likely 208,000, gain of 6,000 not 30,000 so kind of off. Then you’re saying Saskatoon gaining 40,000 in the next two years. A big difference from 8,000 leaving province wide after a gain of 28,000 the 2 years before (If I understand your numbers/dates). And province wide numbers are different than Saskatoon numbers.
And some one at a local bank is still a peddling loans to locals. Maybe the same guy who feeds new home buyers the Saskatoon is going to go up so you better buy now line.
All the pro boom people are just listing resources.
And potential. That potential has always existed.
The numbers still say Saskatoon, population 208,000 ish according to the city itself is not in boom mode. And all we’ve heard about for the past couple years now is how we’re in the middle of a boom. Stats Canada differs, they put us at the bottom of the heap in the western part of the country.
May 12th, 2009 at 2:43 PM
The City of Saskatoon’s population was not 222,000 in 2006, that’s the Stats Canada year. It was 202,000.
http://www12.statcan.ca/english/census06/data/popdwell/Table.cfm?T=301&S=3&O=D
And the current (ie right now) City of Saskatoon website “Saskatoon is Saskatchewan’s largest city with an estimated population of 208,300 and growing (as of December 31, 2007).” Using different methods of counting does not change the fact that using census and the city’s data itself, the percentage change is not and will not be 40,000. Yes, going from a low ball method to a high ball estimate of greater Saskatoon, including Warman, and Dundurn etc… I’m sure you could get the value up, but using consistent methods, there is no evidence to support a gain anywhere near 40,000.
http://www.city.saskatoon.sk.ca/org/quick_facts/index.asp
Thanks though, for your document dated Oct. 2, 2002. Proving that people have been overstating Saskatoon’s population for at least the last 6 years. Although, if you want to argue Stats Canada’ actual count based on a 6 year old prediction (contradicted even by the City of Saskatoon’s own website) be my guest. And sending a 24 page pdf from 6 years ago that doesn’t like the census methods to argue a one point number something that is readily available on Stats Can and Saskatoon’s websites and still only estimate 12,000 over 5 years = Priceless.
May 12th, 2009 at 2:43 PM
Great news! I hope we see more and more news like this showing that the Sask-a-boom is little more than an excuse to jack up the housing prices!
May 12th, 2009 at 2:44 PM
As Doug Elliott, the actual expert in Norm’s post, points out “We’re doing fairly well, but we’re not this powerhouse that everybody seems to think we are.” Based on actual data. Sounds like all of us, media included, have over estimated the strength of the local economy. Enough said.
May 12th, 2009 at 2:44 PM
Dave and C White, All the experts from private firms were making “predictions” and these are actual end of year numbers. So I’d go with these. Regardless of potential, I would say that the economy, like wages in Saskatchewan have not yet arrived. Maybe it’s time that we all stopped heralding this boom, moved elsewhere where each year there growth is greater and they are starting from higher, made more money and came back when wages, high level jobs and the economy catch up to everyone’s ego.
Just because it was a while ago here’s original link
http://www.statcan.ca/Daily/English/080428/d080428a.htm
May 12th, 2009 at 2:45 PM
Star Phoenix from a month ago:
“City loses jobs in Feb.-March
The StarPhoenix
Published: Saturday, April 05, 2008
Saskatoon job growth in the first quarter of the year appears to be going in the wrong direction, with 100 net jobs lost between February and March”
So losing jobs and economic/GDP growth trailing rest of Western Canada … why are house prices up again? What are all these new people doing if it’s not working?
May 12th, 2009 at 2:46 PM
Conrad,
From today’s Star Phoenix.
“Saskatchewan also has one of the highest national rates of employee growth in the same 12-month period (Feb/06-07) at 3.8%, up to 433,300 workers in February for 417,000 one year earlier. Average weekly earnings for payroll employees are also up, at a rate of 4.4% per cent…”
See “EI recipients in Sask. down 20%
http://tinyurl.com/3sq2to
May 12th, 2009 at 2:46 PM
To be clear, I don’t post an article like this because I’m negative on Saskatchewan or Saskatoon. I post it because I posted on all of the big “predictions” and I think it’s important to attempt to be objective.
I’m still feeling pretty good about the potential for this province in the future. That said, I can’t help but shake my head. Consider this. There have been hundreds of positive articles published all over the world about how Saskatchewan is taking off, thousands of people have moved here, and billions of dollars of wealth has been created for those who own tens of thousands of residential properties. Economists were predicting that we’d be “number one” and we actually come in 7th including the territories. Then they say, “well, it’s still pretty good.” I gotta say it looks like a big flop to me. It’s like being the “most likely to succeed” student and then barely passing the class with 58%. Kind of disappointing.
Maybe we don’t know how to boom?
May 12th, 2009 at 2:47 PM
So when do we get the link to the Star Phoenix article that brought up the whole Statistics Canada thing? Would be interesting to see how they spin that, like everyone above, trying to say that they hadn’t said the boom was yet here, or trying to put a big spin on a pretty average showing.
May 12th, 2009 at 2:49 PM
Conrad,
These kinds of fluctuations are not uncommon. It’s the longer term trends which tell the story. On 433,300 jobs, 100 represents at .00023% change. This is much like saying, “there is no growth this month over last month.” It’s stable at worst.
The story I referenced in this post was titled, “Sask. growth lower than forecast.” I can find it in their archives but it’s linked to a different story.
I don’t think I’d hold my breath waiting on the media to explain. They print the predictions but I doubt they’ll be apologizing that RBC overestimated.
May 12th, 2009 at 2:49 PM
Not saying that 100 down is a real decline in jobs, likely margin of error, but again, stable in spite of spiking prices and this huge “boom” doesn’t mean much either. And Feb – March is at the end of your provincial increase, but this decline is for Saskatoon, not for the entire province, although maybe means the gains are done, irregular, or maybe Saskatchewan doesn’t mean just Saskatoon… And really, it is Saskatoon with the increases in real estate prices that should be backed up by steady and large gains in employment month after month.
Not sure how the provincial economy, underperforming the rest of western Canada, at only 2.8% growth barely above national average of 2.7% growth isn’t front page material. It completely flies in the face of all the other top stories that usually just confirm what the previous one said. And it throws huge questions at the fundamentals of this boom. I’m sure people would buy a Star Phoenix, just for the “Wow” factor that we got beat by Manitoba, and everyone else on the block.
May 12th, 2009 at 2:49 PM
Maybe Saskatoon’s best shot will be the ability to draw a wave of ex pats back every so often creating a boom in house buying.
I agree with Norm that this must be somewhat dissappointing. But for people to rally around this report and say “Told you so” is probably premature. For one thing there may be a problem attracting people from places like Alberta to work. That would hamper companies when planning expansions.
Maybe there will be more development as workers from Eastern Canada move to escape unemployment in the manufacturing sector there.
Some things a boom brings with it aren’t so great. It’s too bad housing went up so much so fast but I’m sure there will be growth there.
May 12th, 2009 at 2:50 PM
Norm,
Was that noise the Fat Lady tuning up??
Better get my suit pressed. I’ll need it for the event in Moose Jaw and no doubt one here.
BTW Norm we realtors are never negative. But we do tell it like it is. Sometimes it “ain’t perdy”. Furthermore, I don’t ever remember holding the keys that contol the market or economy.
Your BC Humble-Peddler.
May 12th, 2009 at 2:50 PM
With a slow economy, low wages here and housing that is as expensive as Alberta and more than most, drawing waves of ex pats back or waves of Newfies here may be difficult. Newfoundland leading the country in GDP growth in 2007 does not help either.
The only reason house prices wouldn’t dip on news like this, is the main stream media seems to be ignoring this, every positive story is front page (on predictions) and a substantial negative one actually based on annual data, apparently isn’t newsworthy.
May 12th, 2009 at 2:51 PM
Larry,
I think she wants to sing. I’ll let you know when to be here.
Dan,
Calling 2.8 “slow” is much like calling it a “boom.”
May 12th, 2009 at 2:51 PM
Sorry to bring up the population issue again…
Wikipedia states Saskatoon’s city population is 202,340
(2006) and a metro population of 233,923. But no reference on where the metro number came from.
May 12th, 2009 at 2:51 PM
david,
My hope is for SK not to become AB!!! AB as a province doesn’t have any modesty. I’m not saying I want SK’s economy to suffer and people to lose their jobs, I just want a nice, stable, slow-paced economy… sustainable.
Anyway, I’m happy to hear our GDP numbers are well under predicted forecasts, but still performing fine. Any sort of true “boom” (aside from real estate) hasn’t happened, and it may not happen any time soon. Maybe we will moderate afterall. :’)
May 12th, 2009 at 2:52 PM
Then you want SK to become like Manitoba?
If you ask me, if all provinces and their respective benefits were modeled after Manitoba (or a former Saskatchewan), Canada would be a better place.
The irony is, for the longest time, Manitoba used Saskatchewan as a model for ideals.
I don’t see the appeal in trying to be more like Alberta – seems about as effective saying you want to be in hospital. Who wants that?!
May 12th, 2009 at 2:53 PM
I checked the link David provided:
http://www.city.saskatoon.sk.ca/org/city_planning/resources/population/population_2006-2011.pdf
On the cover it says Oct 02, 2002… Apparently things didn’t go as they predicted. So is the economy. Though I do hope saskaboom is true, in a healthy way.
May 12th, 2009 at 2:53 PM
2.8% is slow, when it’s barely half the 4.8% predicted! And Sask has AGAIN (also in 2006) the western province’s slowest economic growth in 2007!
May 12th, 2009 at 2:53 PM
So all you boosters of the real estate price increases in Saskatoon, how do you validate an increase in real estate in Saskatoon of 50% or greater over the last year and a half? Or is the same old thing (that has actually been said many times in the past) “we’re bound to boom, look at all the resources we have”?
May 12th, 2009 at 2:53 PM
Does anyone have a long term variance analysis on Saskatchewan’s GDP? Plus or minus 2 billion dollars would significantly impact this percentage. What was impact did the Pulp mill have when it shut down in 2006. What will be the impact of Potash revenues in 2008? This would be a more interesting than a percentage.
While it is nice to see the weekly stats, Norm’s significant sales can sometimes offer more insight.
I think this article on scarcity describes last years housing market in Saskatoon: http://finance.sympatico.msn.ca/investing/jimjubak/article.aspx?cp-documentid=7048609
May 12th, 2009 at 2:54 PM
I’ve reviewed the Statscan 2005 data that came out today. At least average earnings increased in Saskatchewan between 2000-2005. In BC, earnings sank a surprising 11% yet real estate prices went berserk here during that time!
May 12th, 2009 at 2:54 PM
i wouldn t call myself a booster of the recent price increases,i just get a kick that some people get lost in all the calculations,number crunching and speculations that they forget he most obvious facts…supply and demand,the question is,is it gonna do a 180,or are people still moving to saskatoon?cause as long as people keep moving here prices will not be going down anytime soon.
Wesco,
isn t the reason Alberta is the economic powerhouse of Canada due to their resources?
you don t think that the fact that our prov goverment is business friendly to the resource sector and the rising cost of oil,potash.this alone in my eyes is the number 1 reason why realestate prices have climbed…Whats gonna happen when they actually start pulling oil out of the tarsands and the bakken oil reserves,or the price of potash triples?
tell you one thing you can expect that 2.8 to rise
May 12th, 2009 at 2:55 PM
Wesco,
whether it is 2.8% or 12.8% GDP growth, GDP growth does not justify our increases we have seen. Our increases happened because of a number of things, justifiable or not, depends on who you talk to.
I am a bit surprised at the stats can numbers, I do know that there have been industries that have laid off people because of our high dollar. To have 2.8% growth is ok but not the boom everybody has been talking about. It will be interesting to see what GDP growth is for Sask in 2008.
May 12th, 2009 at 2:55 PM
Charles, if you check the link our GDP growth for the past half dozen years sucks. Consistently. These are not weekly stats, but annual stats the show actual increases (and a decrease in 2006) in GDP far less than what predictions were. We were all about trusting predictions, but not actual results? Just because the results aren’t as impressive? There is an annual trend of no to small GDP growth, except for the occassional rebound (from loss) year.
Check out the table 3/4 way down page for annual since 2001. And despite mill closure, PA real estate has still went up, rumour has it $250 on average. How is that justified? In a small place that just lost a huge employer?
http://www.statcan.ca/Daily/English/080428/d080428a.htm
And C White, we’ve had resources all along, and the occassional business friendly government, and we’ve been consistently beat for the past 100 years by Alberta in terms of economic growth.
And for all those who are above saying the boom has started yet, I’m sure a couple days ago you were thought we were mid boom. Even on the news yesterday, they were talking about the “boom” and John Gormley this AM on the radio was talking about the “boom”. Yes, we’re all happy to be here (were 3 years ago, but sure now it’s boom happiness) but our economy, since 2001 has yet to approach Alberta, and for BOTH 2006 and 2007, has been outperformed by Manitoba. 2007′s 2.8% growth can’t be anything but a disappointment, when we heard predictions of 4 to 4.8%. Ie. 2.8/(4) to 2.8/(4.8) best case scenario, we didn’t even achieve 75% of predicted growth, worst case scenario we barely achieved half!
To being Western Canada’s slowest growing economy, for the second year in a row.
May 12th, 2009 at 2:56 PM
I would not be the least bit surprised if Real Estate agents spin this report as a good thing. I can almost hear them telling people “Look, the price of housing went up almost 60% the last year and that was with our economy not firing on all cylinders. Once the boom takes off, however, you are going to see gains that that make this previous increases seem like peanuts! Buy now or forever wait by the sidelines!! Saskatchewan IS the place to be!!!”
May 12th, 2009 at 2:56 PM
C White,
You are not to well informed on Saskatchewan oil resources. I agree with on the Bakken oil reserves however i couldn’t disagree with you more on Saskatchewan tar sands. Contrary to popular belief they are not the same as the oil sands that I currently work in Fort McMurray, they are substantially different. First off they are much further buried than the oil sands here and secondly, the most crucial part, they are trapped in shales and because of these factors they are not economically feasible to mine. For the depth the would be able to use SAGD, but SAGD is not as efficient are what the big producers do in Fort McMurray, which is open pit mining. Secondly to extract the oil trapped in shales it will cost more than the CURRENT selling price of a barrel of oil. Lastly the Bakken oil reserves will not create the type of work that Fort McMurry does because they will not have to build the massive upgraders there like they do here. What they will do is pump it out of the ground and send it via pipelines to the refineries in Alberta or the United States, so therefore we will not be building massive refineries in Saskatchewan either. And without construction, there are no construction workers and without construction workers there is no boom, sorry to break it to you. :-0
May 12th, 2009 at 2:56 PM
To summarize the argument to date.
Actual Provincial Sask economy underperforms expectations, slowest in Western Canada in 06 and 07, some say reaching 50 to 75% of predicted levels, definitely was less economic growth than even the lowest predictions.
Saskatoon Population definitely not growing by 40,000, may be increasing, maybe not much. Population according to the City itself is 208,000 on its website at this moment.
Job growth minimal lately, lots a year ago, percentage wise, province wide. Some think boom has been blown out of proportion, others deny any one had announced its arrival; yet. Most think housing price increases unjustified given lack of economic growth/prices based on inaccurate predictions.
Others think potential justifies it all, and that Joe Blow didn’t base his over bid at all on current economy or the news telling him it was cool, but on the potential, that some day, Saskatchewan would have a good economy and some day our wages would be near Alberta, since while our house prices are quickly surpassing various Alberta cities, our average income in Saskatchewan’s a lot less.
Also, Saskatoon and Regina both have the highest levels of violent crime in Canada, some deal with it, some don’t, some don’t care.
Sound about right so far?
May 12th, 2009 at 2:57 PM
And lastly C White, Alberta is not powerhouse directly by their resources, because they give it away for almost nothing. They have the worst royalty rates out of any big oil producer in the world, their not even close. (The worst part is Klein sold them out to the Americans for the next twenty years). Alberta is a powerhouse because of construction and only because of construction. Nobody here cares about the royalty cash, because it is minor. What they do talk about and gloat about is the construction, somewhere in the neighbourhood of 100 billion (conservative estimate) over the next ten years. What does Saskatchewan have? Maybe 10% of that scheduled over the same period? I don’t even think Saskatchewan looks ten years ahead in terms of construction actually.
May 12th, 2009 at 2:57 PM
I hear another forsale sign going up!!!
May 12th, 2009 at 2:57 PM
Alex,
Exactly, except for those bizzare (and might I add slightly greedy) wedding “socials” you guys have. :’P
C. white,
I think the question is how many people are now moving OUT of the province VS moving into the province? I still believe there are less people coming in than last year, and add to that people moving out because of lost opportunity. Until I see stats no one can convince me otherwise that our influx is equal to last year. Also, how many more homes will be listed this spring/summer? There’s already approximately 3X as much inventory as this time last year!
May 12th, 2009 at 2:58 PM
no need to apologize wesco,lol.boom or no boom does nt matter much to me.im just going along for the ride like everyone else
your obviously more informed than I about oilsands exploration and recovery.Perhaps I should have said that Alberta is a economic power house indirectly due to their oil industry,i think we can agree if there was no oil in Alberta there would be limited construction going on.I think if the athabasca oilsands were the lost cause you say they are then we probabably wouldnt be seeing articles like this one.
http://www.gov.sk.ca/news?newsId=0feaac0b-1ee6-4aab-a20e-0ebf9724be9f
then again never trust a politician.
on a different note, what if the majority of the new construction in the city is being taken up by residents of saskatoon.wouldn t that mean by this summer or fall there could be large amount of older homes flooding the market.if we re not having the influx of people that we think we are.That would definatly cause a price drop.Whats your opinion on this Norm,what do you see happening as an agent?
May 12th, 2009 at 2:58 PM
ahh nothing like a manitoba social,i laughed the first time I heard the term cabaret.
i agree with you Heather inventory is gonna get high,question is how much are the prices going to drop?
May 12th, 2009 at 2:58 PM
Heather,
All of my friends who moved back have now left and I don’t think they’ll be coming back again no matter how big of a boom we have here. Hopefully they tell people considering the move here not to believe the hype and to wait and see what happens before commiting themselves to a move. Like I said in an earlier post, the last two individuals to leave, a legal assistant and a skilled tradesman, found affordability to be much better in Calgary than here in Saskatoon. In other news, prices for one bedroom apartment just went up another $250 to $1200 a month in our building, which means that come next month when my three month period is up I’ll be looking for new accomodations. Can we please just set the time machine back to pre-boom Saskatoon, please?
May 12th, 2009 at 2:59 PM
Just checked out our rental companies website, and prices for 1 bedroom suites in Saskatoon are now more expensive than all their 1 bedroom units in their numerous properties in Calgary and Edmonton. In fact, in Edmonton you can get a three bedroom unit for less money than a one bedroom unit in Saskatoon. Must be because of our higher wages here in Sasktoon!
Check it out here:
http://www.realstar.ca
May 12th, 2009 at 2:59 PM
Wesco,
You are correct that the royalty revenues are relatively low in Alberta but they still contribute substantially to the provincial coffers. The numbers I have seen are for $10 Billion per year from royalty revenue in Alberta. Not exactly giving it away. Over 10 years, that equals out to your 100 billion construction spending and is actually far more substantial as this is pure income for the province as opposed to construction where only a fraction of the value is retrieved.
So Alberta IS a powerhouse directly by their resources. The province boomed in the 70′s when oil was high and bust in the 80′s. They are booming again with the massive increase in oil prices and from what I understand of it, very little else. Even your noted construction spending is DIRECTLY tied to the increasing costs of energy.
May 12th, 2009 at 3:00 PM
I left Saskabush two days ago (not permanently, just for the summer) and am now sitting on the third floor of the Vancouver Public Library, looking down on the patrons walking in and out of the concourse, watching cranes swing buckets and guys wrestle with concrete forms on the two condo construction sites that I can see through the windows. I can hear conversations in three languages (Chinese — Mandarin, it’s soft not hard — Korean, Russian?) at the neighboring tables. I had lunch at a Korean supermarket (spicy beef bowl & kimchee) and spent more money on books and clothes walking in here this morning than I have in the past month in Saskatoon.
And this is a little city, by global standards but in terms of diversity, prosperity & wealth, it’s light years ahead of Saskatoon. Yep, Nick, BC has more than skiing and pretty beaches: it’s a pretty lively economy, even if all the lumber mills and pulp and paper mills are closing down because of the US housing market tanking. And if you want to talk about real estate speculation — it’s got Saskabush beat, because it’s absolutely batshit insane.
So yes, I’m not surprised that the Boom! is a little bit more like a Thud!
And maybe when I come back in the fall prices will be a touch more human.
May 12th, 2009 at 3:00 PM
C White,
If the current inventory trend continues it eventually takes a lot of the heat off. We cracked 800 listing today and it’s not hard to find product to show. Homes aren’t running off of the market like they were a few moths ago. Surprisingly, demand continues to be pretty strong. We’ll fall short in unit sales for April, but not by much.
Jason,
$1,200 for a one bedroom apartment? That’s about double in 15 months. They were $590 last January/February. Sickening.
May 12th, 2009 at 3:00 PM
I had the same reaction to Jason’s 1 BR price, Norm — that’s more expensive than downtown Toronto!
May 12th, 2009 at 3:01 PM
Something,
Yes 10 billion per year is a substantial number, however over a population of 3 million that only works out to $333 per person in the province per year, hardly anything to get excited about considering the amount of revenue that oil companies are making. (Shell 9 billion last quarter). The 100 billion dollar estimate is a low ball estimate also that is based on new construction only, if you through in the shut downs over that period that number will easily double maybe even triples. (Then there is all people required to operate and maintain these massive plants) Just Suncor alone has 40 billion dollars scheduled for new construction over the next 5-7 years. The thing is, when you’re planning that much construction its all the support services that are required that really stimulate your economy, engineering firms, restaurants, etc… Construction to me is a sign of a boom and I just don’t see anything in Saskatchewan that compares to these types of projects.
May 12th, 2009 at 3:01 PM
C White,
I read that article, call me a pessimist, but when Wall says “…how much of this economically reconverable” I think he’s eluding to my previous statements without actually pointing out the road blocks of Saskatchewan oil sands
May 12th, 2009 at 3:02 PM
hey westco,
isn t that 3333.33 dollars per person?that makes alittle bit of difference
May 12th, 2009 at 3:02 PM
“are people still moving to saskatoon?cause as long as people keep moving here prices will not be going down anytime soon.”
This is the big question.
What are reasons for and against it.
I believe how this all started was with the people in power getting scared and saying we need to do something, so they had this advertising campaign and it worked to pull some people here and started a speculative play on Saskatchewan real estate. Around the same time, we had all this news about diamonds, oil, potash etc, which seemed to keep expectations high.
But with higher housing prices, it seems there’s less insentive for people to stay.
Unless, there really is some sort of magical demand for work. Is there?
Anyway, my question was:
What are the reasons for and against people moving here or leaving here? And, will all that talk about diamond mines opening up in the next couple years or the oil or whatever have any actual effect on migration?
May 12th, 2009 at 3:04 PM
“…Whats gonna happen when they actually start pulling oil out of the tarsands and the bakken oil reserves,or the price of potash triples?
tell you one thing you can expect that 2.8 to rise”
This was the point I was making before. As Mr. Isaac pointed out in that globe and mail article, the boom hasn’t even begun yet. All this talk and hype were about the diamonds of the future and the oil of the future. These things don’t happen instantly. No one said they would.
What did happen instantly was some people got scared of missing out of this future boom. So they hopped on board. This causes higher prices which fuels the fear which fuels buying and higher prices.
Whenever there is extremely good news or extremely bad news, the market tends to overreact. It may well have overreacted on the upside and there may well be a correcting.
But my question is: Does anyone have any actual data on the effect any of these companies finding these resources will have on migration?
May 12th, 2009 at 3:05 PM
Jason — I particularly like that the company lists 1050-1200 one bedrooms as ‘budget apartments’
May 12th, 2009 at 3:06 PM
“And for all those who are above saying the boom has started yet, I’m sure a couple days ago you were thought we were mid boom.”
Not me. I think we’re a 3-5 years away from any great impact on our economy.
I think most on here confuse the real estate market and think that this is Saskatchewan’s economic boom. It is a real estate boom and probably a bubble.
Take diamonds for example. An RBC report called “The economic impact of diamond mining in Canada” (june 2006) says:
“As two major mines begin production, Saskatchewan could gain a sizeable 1% lift to its economy in each of 2009 and 2011 and over the next 25 years royalties could average $130 million annually for the provianical government…”
It goes on to forecast 1% in 2009 (star diamond) and 1% in 2011 (fort a la corne) and once both are in production, the “incremental GDP impact will decline from a peak of 2.3% in 2013 down to about.5% by 2032.”
So that’s just a forecast, and it’s just diamonds, but it’s in the FUTURE.
Yet, everyone acted as though the discovery in diamonds in Saskatchewan was supposed to instanteously have an effect. How?
May 12th, 2009 at 3:06 PM
C white, your right and that does make a difference, forgot to carry the 0 on the ten billion, my bad.
May 12th, 2009 at 3:07 PM
“Surprisingly, demand continues to be pretty strong.”–norm.
My question is “why” and who are these people that continue to buy and where are they coming from?
May 12th, 2009 at 3:08 PM
“Yes 10 billion per year is a substantial number, however over a population of 3 million that only works out to $333 per person in the province per year, hardly anything to get excited about”
But would $3,333/person be something to get excited about?
May 12th, 2009 at 3:08 PM
So I didn’t see this GDP report, but I did see the Saskatoon census numbers on income. Very interesting. Median household (not individual) income in Saskatoon is $65,839 as of 2005. This is an increase of a little over 20% in five years.
Saskatchewan workers earn the third least in all of Canada (ahead of only Prince Edward Island and New Brunswick) as of the 2005 numbers. Things have definitely improved since then, but it’s a long climb from 7th place in the country…
http://www.canada.com/saskatoonstarphoenix/story.html?id=66c61861-d1ad-4abb-9fda-0ac8238f4107&k=19194
May 12th, 2009 at 3:12 PM
All I hear about here is in 2009 this or in 2011 that. Right now I am hearing about the economic boom on the radio and television constantly too. I don’t think any one qualifies it with the boom hasn’t started.
I think I read in one of the posts that people have recently left Saskatchewan again so it is again losing residents. Just based on people I know, probably half of my friends have moved out of home, often with their parents backing, to buy a slum condo or house. None of them actually moved here. Now some of them are talking about selling their houses and using the proceeds to move some where better.
I would agree. Vancouver is an awesome big, exciting city, with multiculturism and so many new condos that seem bigger than anything in Saskatoon. I think it’s appealing to sell your condo and buy yourself a condo in Vancouver or Calgary with the profit from the condo your parents bought you. My parents didn’t buy me a condo. So I’m left to look for somewhere else to move where I can afford the rent. I wouldn’t have believed 1,200 dollars a while ago. I do now. My rent is only 1,000 for a bedroom and a den, up 200 in the past year, but I have friends, the ones who didn’t buy places last year for fear of being priced out, who are paying a thousand plus for one bedroom.
Now I have all these single buddies in their own places. If any of them get married, consolidation of two condos. Not new people. Not new jobs. Just scared young people who all bought for fear of being priced out. All spread thin covering mortages they can’t afford on hopes prices will go up. And I still think most will move as they graduate or find better jobs as the good jobs still aren’t here. Especially if you’re educated.
May 12th, 2009 at 3:13 PM
As for the GDP numbers – they’re definitely disappointing. And I do find the amount of backpedalling going on to be kind of funny. Before the report hits, it’s “Saskaboom” and it’s unprecedented growth and it’s the “new Alberta” and…uh-oh…
The topic of why Alberta is supposedly “Canada’s economic powerhouse” (I cringe just typing that, and I unfortunately live in Calgary) keeps coming up. For what it’s worth, I’ll remind people again that it’s not about oil. In the future it may be. But Alberta is a province built on natural gas. Read the government’s budget and find out what makes up the largest chunk of resource revenues. Find the biggest employers and see what they specialize in. AECO gas being at $10 is way more important for the financial health of Alberta than crude being at $100.
What $100 oil does though is create a huge psychological effect. I kid you not, people don’t give enough credit to the whole mob mentality. When people are told that things are booming and it’s an era of unprecedented growth, they will act accordingly. Tell people that bad times are upon us and things look grim and they will again act accordingly. Unfortunately these all too often end up being self-fulfulling prophecies – real estate goes up because people think that real estate is going to go up.
Take the U.S. for example. We in Canada seem to be taking endless pleasure at the fact that the U.S. is in a recession and are feeling smug at the idea of our economy being decoupled from our southern neighbors. Two problems though – first the U.S. is nowhere near being in a recession. First quarter GDP numbers were certainly low (0.6%), but relatively speaking, blew away estimates. Funny what a devalued dollar does to your export industry…
Second, Canada’s economy is taking a beating. Look at our latest GDP numbers and forward estimations. The old line about the U.S. sneezing and Canada catching a cold is still fairly accurate. There’s a reason Carney is cutting rates at a speed not seen in a generation – where there’s smoke, there’s fire.
My point in all of this is that people all too often go about their merry way, believing something that just isn’t true. Say whatever you want to about Saskatchewan’s future potential, the point is that it’s current performance is mediocre at best. And nowhere near justifying the ridiculous increase in home prices over the past couple years.
Yes, there is value in buying something before a boom hits. But there is also something called cost of carry, and any real investor will tell you there is no point in buying something now at $100 that will likely only be worth $100 in 10 years.
Normally, I would say that as all too often happens in housing, there will be no “crash”, but rather a slow decline and stagnation of prices while inflation eats up the value (home prices are notoriously sticky). But with Saskatchewan (and especially Saskatoon), I just don’t know. There was a loooooooot of spec activity and an almost perfect storm of conditions that drove prices up. Now it almost looks like there could be a perfect storm of conditions to make it go down.
Saskatchewan can be a great place to live, but these salary and GDP numbers just prove that it’s not enough to justify the prices of housing currently. Again, I have no ideas on how to fix this (and actually get GDP numbers above all of Saskatchewan’s neighbors) – but perhaps actually hiring some of the University grads to stay and work in your province might be a good start. Saskatoon is a blue collar town and its wages in comparison to Regina prove that. What’s the point of training generations of young, intelligent adults just to force them to leave for employment?
The question I posed when this “Saskaboom” first started was “what demographic is moving back to Saskatchewan?”. Is it your young, starting out workers who will build and diversify your economy for their working lives? Or is it your middle aged, empty nest, almost retirees who will create low paying jobs in the service industry and that’s about it? These GDP numbers might be answering my question for me.
May 12th, 2009 at 3:13 PM
http://www.rbc.com/newsroom/pdf/20071012economic-sk.pdf
This RBC report which forcasted GDP growth of 4.8% for 2007 (when it’s actually 2.8) also said this:
“Saskatchewan’s economic excitement must also be put into perspective.”
“Risks to consider such as a decline in potash and grain prices, slowing global demand for biofuiels; strained housing affordability conditions…a potential correction to overvalued oil prices….”
As far as potash goes:
http://www.globeinvestor.com/servlet/story/GAM.20080430.RBERMAN30/GIStory/
The U.N. expects supplies to grow faster than demand, and this can’t lead to price spikes.
Housing affordability….just check this blog.
So there are definitely risks to this economy.
May 12th, 2009 at 3:14 PM
We should all contact the local media and tell them to get off their asses and cover stuff like census data showing all their overly optimistic predictions, which they covered, were over rated. Also, they should stop referrring to the booming economy, when they’re not telling anyone about anything to the contrary.
Just seems reasonable to deman fair 2 sided coverage.
Norm does it, and he’s got a day job.
mailto:cfqcnews@ctv.ca
May 12th, 2009 at 3:14 PM
Well I sent an e-mail to every e-mail address listed on the ctv site. But I doubt anything will come of it, unless more people do the same. So if you think the media aren’t covering the issues correctly, let them know;
mailto:cfqcnews@ctv.ca
Thanks
May 12th, 2009 at 3:15 PM
Just received this feedback from ctv;
”
Hi Wes:
Glad you’re paying attention to the news, but I disagree we’ve been ignoring the down side of the boom. We have done stories on house prices and rents here being higher than Edmonton, doing a story today on several businesses closing cause they can’t afford rising lease rates, and have done dozens of stories on people struggling to find a place to live that’s affordable. We’ve probably done more consistent coverage on that issue than anything else in the last year. Lots of people are talking about it, and we’ve been doing a lot of stories on the problems that come with a boom.
Hope Edmonton is treating you well.
Doug Lett
News Director
CTV Saskatoon
306-665-9247
dlett@ctv.ca
May 12th, 2009 at 3:15 PM
I like how they mention ‘down side of the boom’..as if there really IS/WAS a boom…which there wasn’t.
May 12th, 2009 at 3:16 PM
C white,
The question of how much real estate is going to drop in Saskatoon I believe will be answered by looking over to Edmonton’s current market.
Warren,
I heard that the official numbers for Q1 GDP in the US wouldn’t be out for another month or so… I’ve been misinformed! So it’s still at .6%, but things certainly aren’t looking up for the US either. Will you be surprised if they have negative growth by the end of Q2?
May 12th, 2009 at 3:16 PM
I like the idea of emailing CTV and encouraging them to cover this story, talking about the downside of the boom just perpetuates the misconception that there IS a boom. We should probably take the Star Phoenix to task on not making it a big story too, and the other news outlets, but if everyone emails CTV and demands accurate coverage of actual year end data, and not just speculation, it focuses the pressure on one place. Norm this includes you.
cfqcnews@ctv.ca
or the guy who got back to wesco dlett@ctv.ca
assuming doug lett
Who ever thought we’d be accusing the media of covering only positive news (well not news, positive forecasts, ignoring negative results)
May 12th, 2009 at 3:17 PM
” Lots of people are talking about it, and we’ve been doing a lot of stories on the problems that come with a boom.” Awesome Lett, sorry that there isn’t actually a boom, and that you haven’t done any stories in the week since Stats Canada released data suggesting that we’ve only grown our economy half as much as “boom” predictions, which were wrong, but you reported on those. Maybe report on Stats Canada facts?
May 12th, 2009 at 3:17 PM
Conrad,
I look at it as the media ignoring “positive news” for everyone shut out of the housing market. :’)
May 12th, 2009 at 3:18 PM
TV news is still talking about increasing rent prices because of the boom. Still leaving out there is no boom. Sure there may be one someday. All the stuff above suggests it has not. CTV news opened up with “The booming economy is taking its tole on Saskatoon business” featuring businesses leaving downtown, because rent is increasing too much.
No mention that the economy is not booming. Or that rents and speculation are off base. Is there a conspiracy to cover this up? What’s the deal with the no coverage of average economic growth that was less than both neigbhouring provinces? below expectations? They note that increasing rent has negative consequences, but never mention that it is not justified.
May 12th, 2009 at 3:18 PM
Heather:
U.S. GDP numbers came out on Wednesday. If you’re ever curious about any economic numbers, I really like yahoo’s finance site:
http://biz.yahoo.com/c/e.html
To be completely honest, I would be a little surprised if U.S. growth went negative by Q2. I used to be a lot more bearish, but the more I read and the more I think about it, I don’t think the U.S. will go into recession. Slow growth – yes. Recession – no. Don’t underestimate the importance of the U.S. dollar devaluing, and its effect on American export competitiveness.
The U.S. consumer is going to be hurting – hurting a lot most likely. Foreclosures are going to keep going up and home prices are going to keep going down (for example). But I think there will be a disconnect between Main Street and Wall Street. And ultimately the U.S. will keep on chugging on. It may stagnate for years, but no recession (that’s my two cents).
May 12th, 2009 at 3:19 PM
I found this Final Report on “A Framework for Immigration Action Plan” for Saskatoon(2006) very interesting.
http://www.saskatoon.ca/org/clerks_office/imm_report_full.pdf
On page 60, under “demographic needs” the “key views” seem to show a desperation to get people to move here.
I tend to hate conspiracy theories, but I’ve seen a couple of reports like this now where research has shown that if Saskatchewan is to survive, as a province, it absolutely needs to grow.
Hence, the advertising campaign. And I wonder if the same ones behind that campaign could be behind a much bigger campaign, one designed to show that “everything is great” in Saskatchewan, so you should move here.
I have a question: Who thinks this market is going to free fall? Who thinks it will stagnate for years while inflation takes it’s toll? Who thinks it still has legs to run?
May 12th, 2009 at 3:20 PM
I have to to think that the housing market will drop, it has too, otherwise the city is going to be losing people and definitely not gaining anyone.
May 12th, 2009 at 3:21 PM
jrochest said: “left Saskabush two days ago (not permanently, just for the summer) and am now sitting on the third floor of the Vancouver Public Library”
Hey, welcome to Vancouver jrochest!
Check out this site to get a sense of the insane building activity here http://forum.skyscraperpage.com/forumdisplay.php?f=163
May 12th, 2009 at 3:22 PM
The billboard ads that I’ve seen here in Calgary focus on housing afordability and a more relaxed lifestyle/ higher standard of living available in Saskatchewan.
I think housing affordability is in question in a large part due to Alberta relocations and speculators competing in the market place. And the (housing)boom has negatively impacted the relaxed lifestyle and igher standard of living for (Saskatoon)people caught in the squeeze.
However I think most of the Albertans that “bought in”
have done as well as they expected.
It would seem the best investment at the time was the housing market and people saw that opportunity.
Makes you wonder who the Saskatchewan government was running the ads for.
May 12th, 2009 at 3:22 PM
it was an invitation, be it not intentional maybe, for Alberta and some local speculators and numbered investment companies to buy up as much property as they could and flip. this we all know. so now that they have driven the prices up as well as the taxes for homeowners here does anyone think the majority of city council really wants to do anything to stop it? of course not, that is more tax money for them to waste on crap like christmas lights for a bridge for 1/2 million bucks. hopefully our next election can bring some changes to this insanity. lets hope all these people made homeless because of this situation can get out and vote when the time comes.
May 12th, 2009 at 3:23 PM
lynn said: “it was an invitation, be it not intentional maybe, for Alberta and some local speculators and numbered investment companies to buy up as much property as they could and flip. this we all know.”
Well, that’s the cynical view. Anyone who moved to Saskatoon recently from Alta care to give their view?
“now that they have driven the prices up as well as the taxes for homeowners here does anyone think the majority of city council really wants to do anything to stop it?”
My property taxes haven’t gone up this year … yet. They went up $5/mth last year. And, by the way, Saskatoon property taxes were ridiculous to begin with – way higher than for a comparable property I own in Vancouver.
May 12th, 2009 at 3:23 PM
Cynical view? Well how would you turn this into a positive view? What you made money off of someone else? Yeah that’s a great view to have….
May 12th, 2009 at 3:24 PM
Conrad,
I think this media representative is speaking the context of a housing boom, and I would agree that the media has published many, many stories about the negative impacts that it’s having on some. I’ve had the opportunity to discuss “affordability” with the Star Phoenix on at least a half dozen occasions and they’ve published those comments. There’s another such story on the front page of the SP today.
What can $225,000 get you? Pretty much a dumpy little house
As for economic news, I don’t think it’s realistic that the media isn’t going to cover predications from the Conference Board, CMHC or RBC Economics.
May 12th, 2009 at 3:24 PM
That’s such a bull**** story, they make it seem like a success story that two young people had to take out a 40 year mortgage and also that are lucky to get their place. And then another slight scare tactic of housing prices are going to rise again this summer. It’s still a horrible unreasonable situation for anyone trying to get their young lives on track in Saskatoon………
May 12th, 2009 at 3:25 PM
“My property taxes haven’t gone up this year … yet. They went up $5/mth last year. And, by the way, Saskatoon property taxes were ridiculous to begin with – way higher than for a comparable property I own in Vancouver.”
Didn’t Saskatoon just announce a pretty big property tax increase
May 12th, 2009 at 3:25 PM
Norm, no one’s complaining about covering predictions, we’re complaining that now some actual information came out, that says the economy isn’t actually booming (And they do say “economic boom”) and the media won’t cover the much slower GDP growth.
It doesn’t matter if they do sob stories on poor renters, they are driving up prices by ignoring Stats Canada data which disproves a lot of the “boosterism” they’ve been spouting, and puts into doubt the fundamentals for a lot of the housing boom.
May 12th, 2009 at 3:25 PM
Hmmm. It came across as a story full of trials and hardships to me.
May 12th, 2009 at 3:25 PM
Sorry Conrad,
I got the story about the slower than expected GDP growth from the top of front page of the Business section of the Star Phoenix. The problem is that you expect them to report from a position of outrage. You’re going to be disappointed waiting for a reporter to wail out loud over a news story, good or bad. News is not supposed to be opinionated.
May 12th, 2009 at 3:26 PM
Well, I don’t think outrage, but they make such a big deal about all these predictions, and I don’t think anyone expected this, so I think that is front page worthy. And none of the TV news stations I’ve seen this week have touched on it. I don’t expect them to come and say “because of this housing is overpriced” but I expect them to at least say “the economy is growing far less than expected” and do some follow up on it. News is also not supposed to be anecdotal.
I think the horror stories about rent are just scaring people into buying houses they can’t afford. If they couldn’t afford to buy a house 2 years ago when it was 150,000, how can they afford the same house now at 300,000? I think people deserve to know that the actual overall economy is not growing like we are being led to believe is the slowest in Western Canada for both 2006 (when it shrunk) and 2007 and is barely above the national average. I think this is biased coverage, ignoring a pretty big disappointment.
May 12th, 2009 at 3:26 PM
Also, I still can’t find your Saskatchewan economy underperforms story, think you could get that link up?
Thx
May 12th, 2009 at 3:27 PM
Norm,
Yes at the start of the story it would go along those lines then its “When they found the Confederation Park house up for estate sale, they came up with a $10,000 cash deposit to “SWEETEN” their offer and “TOOK ADVANTAGE” of Canada Mortgage and Housing Corp.’s (CMHC) 40-year mortgage option to “SMOOTH” out the payments.”
That is the part to me where I feel their wording is trying to soften the paragraphs above. I don’t feel they’re taking advantage of anything, just getting taking advantage of. What is that mortgage going to run them if they pay it out over forty years? I figure in the neighborhood of $463,200!!! That is more than two and half times their mortgaged amount of $186,500!!! That is alot of money they committing themselves to “GET INTO THE MARKET” as they claim.
May 12th, 2009 at 3:27 PM
It’s easier to read here:
http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=8ffc596d-11c0-44c3-8e6d-e22d38280402
While I haven’t really thought about whether the news is fair or unfair, it seems odd to me that the only thing we could post about the big news of 2.8% GDP was almost impossible to read.
May 12th, 2009 at 3:27 PM
David,
Thank you. I wrote this post the day after the story ran in the Star Phoenix and I couldn’t locate the story on the website. I appreciate you posting it and I’ll update the main post to include it.
May 12th, 2009 at 3:28 PM
Good to actually read the story. Doesn’t touch on that it was worst of all the other western provinces though, and talks about all the reasons why 2006 was an off year, but you’d think that stuff like a 6 month delay in a huge potash contract in 2006 would mean that all those issues being corrected plus an increase in commodity prices, should see a bigger increase in 2007, since it’s from an off year. Not sure about outrage being needed, but sure seems down played, even from what Norm has above. I mean we got schooled by Manitoba’s economy for 2 years in a row.
May 12th, 2009 at 3:28 PM
So I sent a letter to the Star Phoenix heavily referencing a lot of what people have said above, see if it makes the letter to the editor cut. I’m sure as many people read those as the business section.
May 12th, 2009 at 3:29 PM
Again, why are houses cheaper in Edmonton?
RBC’s latest provincial forecasts:
“Alberta leads all provinces with above-average economic growth
“Alberta’s economy remains the 800-pound guerilla of Western Canada. At some $290 billion, Alberta’s GDP — gross domestic product — is almost 15 per cent larger than that of B.C. and Saskatchewan combined.
So when housing starts in Saskatchewan’s two major cities soar by 60 per cent — as they did in 2007 — it’s from a tiny base. Even with a slowdown, Alberta’s housing starts will top those in Saskatchewan by six or seven to one in 2008.
Indeed, although home builders in Edmonton plan to curtail new construction in the first half of 2008, some are already worrying that they won’t be able to meet new demand by this fall, when inventories are likely to be depleted.
In short, rumours of Alberta’s economic demise are greatly exaggerated.”
http://edmontonrealestateinvestorabroad.blogspot.com/2008/01/albertas-economy-envy-of-canada.html
May 12th, 2009 at 3:30 PM
I’m glad I read this blog. I get more positive information here than from my local news.
I looked at the story about the young couple trying to buy in. I guess it illustrates the main point to all this, and I know I’ll get my arms and legs pulled off for what I’m about to say but here goes.
The upswing in Saskatoon housing prices is largely due to people making personal choices. There may be winners and losers in the end but no one holds a gun to your head and forces you to buy a house. Usually the purchase is made in the presence of positive reasoning. Optimism about the future economics, wanting to set roots and contribute to a community etc. If Saskatchewan’s econoomy does expand and it is likely that it will, then this young couple will feel very good about their purchase. If not then they will adapt and cope with the impact of their decision as time goes on.
Life goes on.
May 12th, 2009 at 3:30 PM
I wonder where the couple GOT the other money…If they only were approved $125 grand, then all of a sudden got approved for $225 that’s kind of fishy. Kind of a ‘customized story’ don’t you think?
Absolute silliness.
May 12th, 2009 at 3:31 PM
Probably needed to borrow from family and save up for a bigger down payment, and then got from a 25 year to a 40 year mortage, a good example of a couple who probably couldn’t afford this house normally.
And no one’s saying a gun held to head, but people are all buying these houses with the assumption Saskatchewan’s economy is booming, when it really is growing at the same old slow and steady pace, trailing the rest of the west, that we’re used to. They aren’t being given the knowledge to make informed decisions.
That and faulty advice from some realtors, apparently not Norm. A friend of mine recently bought a town house in Erindale, for 290,000, and was told by the realtor it would be worth at least another 60,000 right away if she just finished the basement. Really, $350,000, for a 2 bedroom town house just because its tiny basement is finished? I have yet to see that. And other (posted above some where) about some guy whose bank mortage guy told him Saskatoon was going to grow 40,000 people in 2 years (after the boom of 2006/2007 Saskatoon has grown 6,000 people in one a half years). Some one has used the term “booster” on this and I think that’s a better term. Saskabooster. Who knows what is actually going on. People’s knowledge base is based on rumours and speculation and what they see in Stonebridge instead of an actual justified economic boom. Now everyone is talking about “Well the boom isn’t here yet” when 2 weeks ago we all, including me, thought we were mid boom, until I found Norm’s blog and you hear inventory keeps climbing and the economy never did boom
May 12th, 2009 at 3:32 PM
This is an interesting interactive website. Shows income by Region and City. Will eliminate all the who makes what arguments on this blog.
Canadian Median Individual Income: $25,615
Saskatoon:$26,112
Regina:$29,308
Calgary:$30,831
Edmonton:$29,195
Winnipeg:$26,334 (suprising a bit above Saskatoon)
The gap opens up when wage for some one with university degree is compared:
Saskatoon:$56,966
Calgary:$65,044
Kind of fits with what we’ve heard, about if you want a good job, then you need to move to Alberta.
http://www.cbc.ca/news/interactives/cp-income-stats/
Take it for what it is, for me, this reinforces that houses should be more expensive in Alberta (and not cheaper in Edmonton)
May 12th, 2009 at 3:32 PM
Also, people earning above $100,000 a year:
Saskatchewan: 17,385
Alberta: 149,415
Wow over 8 X as many (with 3 X the population)
May 12th, 2009 at 3:32 PM
Apparently we suck at education too.
http://www.cbc.ca/news/background/education/pcap-report.html
May 12th, 2009 at 3:33 PM
In addition to Conrad’s comments, some of those peoples making a $100,000 or more are making their money in Alberta (like myself) and are filing taxes in Saskatchewan. I have other friends who work on the pipelines and do the same as me and I know their making over 1ooK to, so really the gap is actually greater than reported.
May 12th, 2009 at 3:33 PM
I have only posted on here once as I was looking for a Regina blog but I guess this is as close as it gets. I have spent the majority of my life living in Regina and still bleed Green (Roughrider green that is). You guys seem to have several of the same unanswered questions we have in Calgary.
People seem to be leaving Calgary. So if Alberta’s net migration is down and so is Saskatoon, where are they going? I heard perhaps it is Estevan where the oil is but that can only account for a small number right?
I have seen several of these “move to Saskatchewan ” ads last summer. At the time it was very appetizing. Once you’ve lived in Calgary long enough you will actually begin to miss small city life. You get tired of being stuck on deerfoot for two hours, someone getting stabbed weekly, drivers theatening to kill you for not driving with a leadfoot, $8 /hour parking downtown and the ridiculous high cost of living (not talking about housing). But now with housing in the new areas of Regina/Saskatoon costing MORE than the Suburb areas of Calgary and white collar wages coming no where close, it makes no economical sense. I understand the skilled trades market is paying big bucks there but I recently asked some of my friends who are accountants and they told me I might as well stay were I am…the same reason why I left in the first place. I would have been happy to move back to Regina and take a 50% paycut (again, this would not be the case if I was blue collar) to get a better lifestyle if the housing did not go thru the roof but that is currently not possible. At some point we hope to move back but it won’t be anytime soon.
You guys all post some really good stats and arguments. Please keep up the good job as this is the best source I have found for Saskatchewan’s economy/markets.
May 12th, 2009 at 3:33 PM
Very good point about the Saskatchewan residents working in Alberta and filing taxes back in Saskatchewan. My brother is another one of them.
I’ve tried to explain to him repeatedly the ridiculous amounts of income tax he’d be saving if he would just use my Calgary address as a residence…
May 12th, 2009 at 3:34 PM
I think a lot of people who are now cashing out of Alberta, and Saskatchewan at the peak may be going back home. This could be Newfoundland whose economy did well last year, or Manitoba which seems to be doing good. They’ve made some extra money and can buy a nice place elsewhere, or a 2 bedroom condo in Sutherland. And if we’ve learned nothing else from the whole overly optimistic economic forecasts being wrong, when we found out the Sask economy actually only grew half of predicted, it’s that all these interim predictions, population or economic are just predictions. It’s kind of premature to say Alberta’s poplulation is up or down much on a month by month basis. I’d wait till 2011 when the actual population is counted before worrying about it. Alberta will probably still be up a lot and Saskatchewan a litle bit population and economy wise. We should stop worrying about RBC forecasts.
May 12th, 2009 at 3:34 PM
This report of economic underperformance is good news. I just pray that it’s actually true; and I hope that things change *SOON* because of this “underperforming” economy.
I’ve said this before, but a booming economy is NOT worth it if it means that people are forced out on the streets due to pure greed and incompetence. There was no problem with pre-boom Saskatoon–at least then, people weren’t being kicked out of their homes and/or seeing their rents quadruple in a mere few months.
A “booming” Saskatoon means absolutely nothing positive to me. I personally see none of the benefits of a boom, but I certainly suffer the negative repercussions. All a “booming” Saskatoon has meant for me and countless others is much higher rent and the grim, almost certain possibility that I will be kicked out of my soon-to-be-converted-to-condos-apartment.
Here’s to a NON-booming Saskatoon!
May 12th, 2009 at 3:35 PM
I just recieved in my mail from Colliers, an offer to be brought into a lease until 2010. My place is being converted and the rent has gone up from 530 to 650 and come july to 750. They have in the contract that once they lock you in, they can keep ‘adjusting for market values’ (only up of course).
Ah good old real estate…i bet you Colliers and others that own a bunch are just CLEANING UP.
May 12th, 2009 at 3:35 PM
I think the problem is the report showing there was no boom is true since it’s from stats Canada but doesn’t sound like anyone knows about it. We should probably stop talking about the boom and start spreading the word it didn’t happen. Should help prices down as people realize it was all hype. As is, we’re just buying condo conversions out of fear, when we probably should be renting.
May 12th, 2009 at 3:35 PM
I don’t understand why companies that rent out apartments are allowed to get away with rent increases based on “market value”.
The behaviour of the businesses has become one step worse with them acting like now they don’t even have to sell you a place to rake in the cash.
Potential market value is so subjective and so arbitrary, basing rent on it is just outright wrong.
But greed always prevails today as people are too passive to challenge anything.
May 12th, 2009 at 3:37 PM
Alex,
I will be phoning Colliers today and pushing to see if it is indeed a ‘crooked’ contract like i suspect. I will be sending letters to the city, and to a couple media sources (probably to be ignored) and hope that something comes of it.
I suspect people are scared to do this becuase they could get red flagged by companies to not be rented to etc…what i’ve found is that ‘burning bridges’ isn’t so bad since i wouldn’t want to be associated with them OR other companies like them that they have contacts with if they treat people like this.
May 12th, 2009 at 3:38 PM
Jesse,
You couls also call the “Office of the Rentalsman.” I’m sure they be happy to take a look at the proposed lease. 306-933-5680.
May 12th, 2009 at 3:38 PM
Jesse,
I think you’ll face a harder time convincing people that anything is wrong in the first place.
While you can get some people to admit that something is a “crappy situation”, you’ll find it difficult to get them interested in doing anything about it. Or even agreeing that something should be done.
That’s just a sign of the times right now, where no cause is worthy of attention unless it directly affects someone.
Your experience with the rentalsman is probably going to lead you nowhere except short $25 bucks to file a complaint with those paper pushers. The fact of the matter is that we have a system tailored to show preference to the business. Quality and standards are so plain and easy to interpret that they don’t want to admit that the vast majority of companies renting these days cut too many corners.
…Let alone overcharge.
Laissez faire is proving just how bad it is to rely on the good nature – or complete lack thereof – of others. Free market idealists are a greedy, insular and selfish lot.
May 12th, 2009 at 3:38 PM
jesse, do not sign that lease! that is insane! you would be locked into an agreement that says you have to pay whatever they want until 2010 at their discression basically. with all the speculative unrealistic rise in real estate they could charge pretty much whatever THEY feel is market value. this is the worst rental contract I have ever heard of. you get the price locked in and do not settle for less. do not do business with any company that condones and practices shady agreements . they are treating people like they are desparate and if people go along with crap agreements like that, it is one more way for this rental and buyers situation to screw people over.
May 12th, 2009 at 3:39 PM
Thank you all,
Yeah no I will not be signing the lease in any shape. That may mean that I’ll be out looking for a place but I’d rather have a little trouble finding another place to rent than put up with these Goons.
May 12th, 2009 at 3:39 PM
I agree that this sounds like a very goofy proposal. There must be an early termination provision in Jesse’s favour? It’s lunacy to expect anyone to sign a lease of this duration that leaves rent open ended.
Perhaps this is some attempt to circumvent the rules and vacate the building before the allowable time for tenants.
Jesse,
Do speak with the Rentalsman. I think you can likely do that for free and most people will tell you that they do act for tenants. They don’t exist to protect landlords. Obviously, the question they ask in reviewing the lease is, “Is this legal?” and not, is this fair, but there is a pretty good residential tenancies act in this province.
May 12th, 2009 at 3:40 PM
Just don’t feel like you need to buy a crappy condo conversion to solve your whole rent mess, then you’ll just be perpetuating the whole thing. And with the market getting flooded with available units, you’re probably better off just toughing it out on the rental market for a while.
May 12th, 2009 at 3:40 PM
Just from CBC, after tax, Sask well behind BC/Alberta
Tax likely gives slight edge on Toba’s higher income
“Median after-tax family income — 2006
Province Income
Newfoundland & Labrador $45,800
Prince Edward Island $50,000
Nova Scotia $51,600
New Brunswick $47,600
Quebec $51,500
Ontario $62,400
Manitoba $53,900
Saskatchewan $55,900
Alberta $70,500
British Columbia $60,300
Source: Statistics Canada”
http://www.cbc.ca/canada/saskatchewan/story/2008/05/05/incomefamily.html#postc
Thought I’d get my two cents in, seems boom or no boom, this sight makes it look like no boom, our wages are still lagging behind the country’s major economies, you’d think in a boom and labour shortage we would have higher wages
May 12th, 2009 at 3:41 PM
Thanks Norm for that,
I will be going through the contract with a fine tooth comb, and talking to the rentalsmen as well.
Kenton,
No worries about me buying a condo to perpetuate, I don’t qualify.
May 12th, 2009 at 3:43 PM
Okay,
I got off the phone with Colliers regarding the lease. There IS a clause that the tennant CAN terminate their lease at any time with 30 days notice. Thank goodness for that. I guess it isnt’ as crooked as I thought. I will be getting it in writing either way. Just thought I’d fill everyone in that this so far at least turns out to be a somewhat positive protection for myself (the renter).
May 12th, 2009 at 3:44 PM
Good to hear it worked out. Still seems illegit that they can jack up prices on you though. Kind of squeeze you out for a potential conversion.
May 12th, 2009 at 3:45 PM
See on the other side some BMO guy is off his rocker again.
“BMO dude thinks Manitoba and Sask won’t be cooling off”
Yeah, not sure what he means by not cooling off. If he means Sask can at least sustain another back to back negative0.4% and 2.8% worst in Canada for 2006 and worst in western Canada for 2007 or 2.4% over 2 years, that shouldn’t be hard. I think anything less would be considered a recession. Not sure if he knows we were never actually hot. What the heck could we possibly be cooling off from? A western Canada worst 1.2% average annual growth over 06 and 07? Less than a third of BC/Alberta or even Manitoba from end 2005 to end 2007?
Anyone have yet to see Nick’s letter he mentioned make it to the paper?
Why will no one accept that the economy was average at best in 2007 and down right sucked in 2006? Why doesn’t the average person on the streets of Saskatoon have any idea? Like Kenton said “Spread the word” – doesn’t look like the media feels like reporting on actual stats, just what some random guy at BMO or Royal thinks those stats will be a year in advance.
May 12th, 2009 at 3:45 PM
Ya Jim! And if the bash Saskatchewan campaign goes over really well, perhaps we can even loose some of the job and income growth that we’ve experienced here. Maybe we can roll back wages several years. It would be great if we could all be on welfare and have really cheap houses. Yahoo!
May 12th, 2009 at 3:45 PM
Nobody, including myself, wants Saskatonians to be on welfare. But I think most of us would admit that this “boom” really hasn’t done much in the way of improving this city. All this “boom” has done is make the cost of living here skyrocket needlessly and at an unhealthy, exponential rate. And it’s quite irksome that this boom (at least up to this point) is more or less a fictitious one, driven by greedy out-of-province investors swooping down and buying up every lot they can get their hands on.
The way this “boom” is going, there *will* be a lot more people in this city on welfare. Common sense really needs to return to Saskatoon.
May 12th, 2009 at 3:46 PM
Robin,
“This report of economic underperformance is good news. I just pray that it’s actually true.”
I understand that housing changes have caused many to experience major challenges. I’m not so sure that statements like this one represent “common sense.” Some of the solution for those hurt by these changes has to come from improved economic conditions. You won’t get a raise, or have confidence in the security of your job by wishing for the worst.
May 12th, 2009 at 3:46 PM
Well if raises are in the neighborhood of the real estate increases I’m for sticking with the prices, however if the raises are not in the same magnitude, how can you not hope for a decrease?
May 12th, 2009 at 3:46 PM
Wesco,
We’re not talking about house prices, we’re talking about economic growth. They don’t hand out raises of any kind when an economy is stagnant or in recession. I’m just saying that “under performance” isn’t something to celebrate or hope for.
May 12th, 2009 at 3:47 PM
Ok gotcha, I agree with that statement totally, I don’t want any under performance in Saskatchewan beleive me, people are hard up enough as it is.
May 12th, 2009 at 3:47 PM
“They don’t hand out raises of any kind when an economy is stagnant or in recession” Couldnt’ agree more Norm. Which is why with wages $15,000 less than Alberta (and less than Regina by a few K) I would hypothesize the economy is not actually booming.
That and that whole disappointing GDP growth stuff that put us as western Canada’s slowest growing economy for 2006 (Canada’s worst growth) and 2007 (western Canada’s worst growing economy). I think the fact that wages are still so low here just confirms that people’s optimism isn’t backed up by their crummy jobs or the province’s GDP.
And I’d settle for lower wages, if people at least knew it wasn’t Saskaboom, maybe house prices would be more affordable and we wouldn’t need to make Alberta wages to pay for our now Alberta priced housing.
May 12th, 2009 at 3:47 PM
Apparently the Star Phoenix will publish letters. Maybe Wesco, I et al should start mailing them with logical arguments on why the economy isn’t so hot (Nick seems to have left out the actual $15,000 income gap) and ignore CTV/Global, who don’t even reply to emails.
http://www.canada.com/saskatoonstarphoenix/news/letters/story.html?id=31ecc3fa-b2a3-46fa-a4ae-de640743f8e3
May 12th, 2009 at 3:47 PM
“I’m not so sure that statements like this one represent “common sense.”"
Yet there are tons of people who have had zero gain and zero loss (or stand to lose nothing) in the whole ordeal.
These are people who are acting like nothing is wrong. They are coasting off of momentum from having bought in long before Saskatchewan was targeted with this greed campaign.
If things collapse in, they will simply wipe out the people who got involved when they shouldn’t have. In my eyes, that will give all these people living too large the opportunity to realize a more modest version of themselves.
Economically, it is a disaster. Socially, it is a disaster. To communities, it is a disaster. Even on a psychological level, people are made worse by the increase in wealth.
Okay, you know – make the accusations of hearsay and conjecture if you want. I’m sure a nice session of ego stroking would go just as far, but I challenge you to legitimately refute what I say.
All the Saskatchewan boom was, was an increase in cost across the board with zero movement in wages. I’m sure you can point to some averages that may have swelled slightly. But does that represent the almost 200% increase in prices?!
Where does 200% come from? Putting it into perspective, back in 2004 I could have bought a house while in Saskatoon working as a computer sales rep…
WOW! No wonder Saskatoon felt like “Good old Canada!”
Factoring everything in, after two years of college and two cross-province moves later, I’m now breaking even. Had I stayed in Saskatoon?
I don’t sincerely think Saskatoon has the leg up on Winnipeg when it comes to just about anything. The same can be claimed comparing Saskatoon to just about anywhere. Yet we have < $200,000 homes still and a damned sight less red herrings swimming around…
Ben, you’re nuts if you think house prices should be so high even after a correction.
Wages haven’t moved a DROP and the businesses love it. The same circles of thought that have no issues outsourcing and employing in sweat shops are now realizing a long coming dream: A Canada that hates its own people.
I don’t know a single business today that doesn’t treat their employees like crap on the basis that their only other option is to be passed on to the next company and be treated the same.
Let’s stop looking at statistics and realize the poverty created for what it really is.
This is more than housing too. This is a lot more to do with “the masses” being foolish enough to see business acumen as an eligible and desireable quality for governing people…
I’m just about run dry on this one. Talking about greed on a real estate blog is like happening upon a pack of lions eating…
May 12th, 2009 at 3:48 PM
What good are “raises” when the cost of living skyrockets so high as to nullify any wage raises (if ANY)?
The common sense I’m referring to is *measured*, *sensible* cost of living increases based on actual economic stimulous and growth, not a ridiculous greed-inspired housing situation that is based on some fictitious boom. I don’t think I can be blamed for wanting a sudden end (and reversal) to the ridiculousness that is the Saskatoon (and Saskatchewan) situation. A lot of people are being harmed by this insanity. It needs to stop, ASAP.
If this situation continues for much longer, I will probably be forced to leave my home and move on elsewhere.
May 12th, 2009 at 3:48 PM
Alex,
“Talking about greed on a real estate blog is like happening upon a pack of lions eating…”
That’s absolutely hilarious! As long as there’s one person on this blog who has a ray of hope you’ll feel that there’s a lack of balance. Comments like these really reveal your lack of rationality.
“Wages haven’t moved a DROP and the businesses love it.”
You are as disingenuous as the “pumpers” whom you despise.
Robin,
I thought I was clear about the distinction between our housing issues and the economy. Besides Alex, you’ll have to hunt long and hard to find anyone who will agree that a slowing economy will bring much improvement to your financial circumstances. That said, I sincerely hope that the year ahead brings you some sense of security, at home, and in your pocketbook. I mean it Robin and I am fairly confident that some relief is in sight on the housing side. A raise or two won’t hurt either and I hope you get them.
May 12th, 2009 at 3:49 PM
Thanks for the well wishes, Norm.
May 12th, 2009 at 3:49 PM
“As long as there’s one person on this blog who has a ray of hope you’ll feel that there’s a lack of balance.”
Ray of hope for who? Just who is getting the consideration in all this sentiment? It’s pretty vague so far and that references back to my red herring statement (un-challenged).
“You are as disingenuous as the “pumpers” whom you despise.”
I am willing to engage on that note with *anything* you want to use to substantiate that. I’m not going to force you into needing statistics or other regulation approved methods of debate. But don’t mistake my being open as being pliable.
If there’s an observation to be made, make it. But that line is more a sound byte than anything else.
Wages haven’t improved and if I had remained at my job in Saskatoon, I would not be making as much as I am now in Winnipeg – I would also have a lot less to show for it (Winnipeg better off, another un-challenged point).
I’m disingenuous?
(Appreciate that I’ve risen above your statement and not reduced this to a war of semantics saying “but you made a dig at me!”, it serves nobody.)
Now how can anything disprove something so reliable as first hand experiences? There’s a lot of people here to show that the current approaches are doing nothing to help address the issue.
Case in point: You wish Robin well, but you won’t support a point of view that ensures he wont be near scalped just to have a humble future?
Aside from the two swats you made, is everything else I said not disingenuous? Or is it too easily put into a real context to even address?
May 12th, 2009 at 3:49 PM
Alex,
I learned long ago that engaging you is a waste of time. Have you ever changed your mind?
Your comment about incomes is a bold faced lie (or at best, an ill-informed misrepresentation of the truth). You know it, I know it, and everyone else knows it. I won’t bother you with the facts.
May 12th, 2009 at 3:50 PM
Wages have definitely increased in Saskatoon, I can be the vouch for that. When my class graduated two years ago, not one person would consider a job for less than 50k per and that was to stay in Saskatoon. 90% of my class mates got a job in Saskatoon and for 50k or more, the only ones that left had determined prior they were leaving or had really great job offers in Alberta. Our professors had never, i mean never, seen job offers like that before and they have been teaching at the UofS for a long time. The only reason I left was for a substantially better offer in Alberta that I was really fortunate to receive otherwise I would have stayed in the city because I had another job offer for 55K plus full benefits in the city.
May 12th, 2009 at 3:50 PM
Alex,
With all the provinces, Saskatchewan had the best overall growth in wages the last year with 7.6%. Alberta had 6.9%. Manitoba saw a growth of 5.7%.
http://www40.statcan.ca/l01/cst01/labr69i.htm
The average wage has increased from $18.58 in March 2007 to $19.99 in March 2008 in Sask. Average wage in Alberta is $23.45. In Manitoba it is $19.21.
May 12th, 2009 at 3:50 PM
Wages are definitely up … still lag way behind Alberta though, and those averages are likely overall. With a university degree, the Alberta Advantage widens, and I fully believe the 10,000 to $15,000 more with a university degree in Alberta.
Anyway, if any one wants to put in their 2 cents about how the economy didn’t grow much last year and while we obviously all want it to do well and high wages are awesome, the current growth in the economy just does not justify house prices doubling in a couple years, and that “Saskatchewan has yet to boom” feel free to email Star Phoenix letters to the editor, they actually published my letter, after the TV stations all ignored requests that they at least report on the story. And I think a 10% drop in real estate prices would be good for everyone, and justified given economic growth much less than forecast, and wages that while growing, are still much less than Alberta. Assuming George’s comment is true, $3.50 an hour X 50 weeks X 40 hours works out to about $7,000 more a year in Alberta. So their houses should be more expensive, as they can afford more. Plus they have slightly lower income tax. And again, make way more if they have degrees or skilled training. I think prices on houses going down a bit will actually get the overall economy going up to potential, as right now, prices that expensive are likely a deterrent to in migration at this time.
spnews@SP.canwest.com (they will publish your 2 cents, just back it up, I found this page great for references)
May 12th, 2009 at 3:51 PM
Nick,
I caught your letter which was well written and confronted the facts quite precisely. Did you happen to catch a link to it on the SP website? If I’m a day late it seems to get difficult to find but I’d love to post it here for anyone who may have missed it.
May 12th, 2009 at 3:51 PM
Courtesy of Conrad (above) It does seem surprising how hard it is to get stuff off the Star Phoenix Website more than a day later
http://www.canada.com/saskatoonstarphoenix/news/letters/story.html?id=31ecc3fa-b2a3-46fa-a4ae-de640743f8e3
May 12th, 2009 at 3:51 PM
I forwarded on the link to the letter in Star Phoenix to some of my buddies, probably holds some more cred since it’s in the paper and not just some blog , might be good to have it floating out there on the net, at least make people think twice before paying for a house double what it should be with that 5% raise. I think it’s awesome to actually have people involved and questioning what the media tells us. Power to the informed person. People saying “economic boom” po’s me. No back up. Just it’s on the news. It’s proven. And like some one else said, who cares how big Walmart is? The States has some huge Walmarts, they aren’t doing so hot.
May 12th, 2009 at 3:52 PM
Thanks Nick,
I had forgotten that Conrad posted it.
May 12th, 2009 at 3:52 PM
Norm,
Ouch! That’s a lot of venom.
I truly am interested in the facts. I’d also appreciate a breakdown of which brackets had the increases.
I want to make sure we aren’t misrepresenting the impact of appeasements to dismiss the issue.
An average can be easily lifted by gains in higher brackets.
Where’s the breakdown? Are the rich staying rich while the middle class is forced to tread harder?
Canadian Center for Policy Alternatives disagrees with any notion that people are doing better *anywhere*. Who are any of us to disagree with them?!
I won’t apologize for using direct observation as my basis. First hand experience is fairly compelling. Not to mention the steady stream of evidence pouring from news sources constantly.
Bother me with the facts.
May 12th, 2009 at 3:52 PM
Alex,
just look at the link from statscan I gave earlier. It gives a pretty good summary of different industries and occupations.
May 12th, 2009 at 3:53 PM
I’m not sure what jobs have went high high higher…I’m getting highest I can seem to get in my field, drafting architectural plans, which is why i’m remaining where i am for the time being, and i’m getting a wage of $21.55 an hour. I know that in my field at least, the boom, the prospects of a boom, the fake boom, nothing really makes a dang bit of difference when it comes to what companies pay. If you are in the oil business that may be different, or potash, could be, but in the architectural and construction field? The wages have CREEPED. I’ve got almost 10 years under my belt too. I’m not a newbie.
May 12th, 2009 at 3:53 PM
What Jesse outlines isn’t unusual or in any way an exceptional situation. The middle class is largely comprised of these kinds of jobs.
Many IT positions are exactly the same.
Now is the time for the age old “guess you’re in the wrong field” statement…
If wages are doing so great, why are there so many issues with rental rates increasing?
I don’t know how anyone can outright say that current wages are in step with costs – and worse still: The way costs are going.
Callum: “sojourning genie”
May 12th, 2009 at 3:54 PM
Alex,
I LOVE the ‘guess you’re in the wrong field’ statement too.
What would be nice would be proof of positions that have high wages in all kinds of fields so people could get a better more unbiassed view. Though as per usuaal we’d see you can make a lot as a ‘manager’ of anything. It’s not enough to fool some of us though.
May 12th, 2009 at 3:54 PM
For the record, I did not “outright say that current wages are in step with costs” and I don’t recall anyone else ever making that suggestion. Any moron can understand that housing cost increases of 100% plus are not offset by the pace of income growth in Saskatchewan.
May 12th, 2009 at 3:54 PM
Norm,
Certainly! I think that’s a sensible observation. So what then is to happen to all the people who could have afforded a home without anyone questioning it, who now can’t afford a home?
By simple extrapolation, how can we then continue to assume current theories on handling the market are anything but enabling if not creating all the problems we face?
Leaving things be will only allow it to get worse as it assumes that somehow people will develop a method to gain the upper ground on those wealthier than them.
We only need to look at the past 2-ish years to see that.
Relying on the good will of money obsessed people (investors, starry eyed home owners, flippers, landlords) references my “pack of lions” statement earlier. You’re not going to massage good and beneficial intentions for the *people* by telling these animals stories of hardship. They know no restraint and they know the damage they cause.
There’s an imbalance here that’s failing to be recognized and every time an adjustment is made, their wealth allows them to climb back to the top every time! Surely this is plain as day obvious by now. People don’t have the resources or the time to out-decide those with more money and more time – so why does every solution seem to involve people becoming slaves further yet to the wealth of others?
Examples?
Look at ideas for private/public apartment collaborations from some people here. It’s practically an equity vending machine at the cost of the public! What would they get out of their investment? No guarantee!
Affordable housing initiatives – spare me the defense of the poor, I’m blocks away from worse – take the poor and put them in homes, sure. Homes worth nothing, that will never act as the kind of leverage other homeowners get. Generally speaking, those getting in on affordable housing do not live hand to mouth either, they are respectable people!
The CMHC makes a home more expensive only when one can barely afford it. Seems a bit backwards to me!
Any more? You probably know of more than I do.
The irony here is that many ideas involve the evil government free market idealists so love to chastise. Yet somehow it’s okay now that it’s working for them!
Like the common factors in any other situation that warranted regulation all of them are now present in housing. There could be stunning overnight improvements to our economy by putting the brakes on *greed* right away and stacking the deck in favor of the people for a while.
I’ve compromised a fair bit more than I think anyone should given the way wages are now (thank the greed of companies). I paid $120,000 for a house I know should never have gone for a cent over $80,000. But demand has increased – this much is true.
But the response, Norm, should never ever ever ever have been to capitalize off of that in such a way that it would throw our country’s youngest into years of crippling risk and debt.
If you didn’t outright say anything, what’s being implied? I can understand if you want to hold back on divulging that opinion, but why are you coming at me so hard when I’m only stating the obvious: Things aren’t working right now.
May 12th, 2009 at 3:55 PM
I did not take issue with the majority of your points.
You implied that this blog is dominated by “a pack of lions eating…” I’m sure those people are here, but they’re certainly not very vocal.
You stated that “incomes haven’t increased a DROP.” This is clearly untrue. While you embrace StatsCans news about the economy in general you suggest that income stats from the same source are flawed in spite of evidence to the contrary.
Finally, you seem perfectly comfortable putting words in my mouth and suggesting that I’m saying things I’m clearly not, in spite of my repeated insistence to the contrary.
May 12th, 2009 at 3:55 PM
Jessie,
Are you an actual architect or a draftsperson? I ask this because one of my very close friends is an architect and moved to Calgary from Regina two years ago. At the time he had 6 years exp and was making about 40k for a wellknown archtitectural firm (one of the largest in N.America) When they moved him to Calgary they bumped him to 50k without him asking. He thought he was getting a pretty good deal until he found out new grads started higher than him. So he got an offer from another company and tried to resign. When he did the firm immediately said “we were just thinking about how you were underpaid and were JUST about to bring you up to market salary” which was 65k. This was pretty conveniently deceiptful mind you as he just finished his designation and now should be worth a min 75k in Calgary but that’s besides the point. The point is, for this specific industry Calgary pays MUCH higher than Sask….OR my friend was WAY underpaid the whole time….which is possible too.
May 12th, 2009 at 3:55 PM
Employment in Saskatchewan continues to grow with boom
Employment in Saskatchewan jumped by 8,700 jobs last month compared to April of last year, as the province’s economy continued to boom.
http://www.canada.com/saskatoonstarphoenix/story.html?id=d3a7057d-fbcd-49b4-8bef-0ea21867055d
May 12th, 2009 at 3:55 PM
“province’s economy continued to boom” so Callum, does that mean our GDP growth is at least now going to be above average? Above Manitoba? I still don’t think you can say “econom[ic] boom” when the actual dollar figure on the economy grew at a pretty average 2.8%, when the whole darn country averaged 2.7%. And these are year over year job growth figures. How much is employment up from last month? Was last month up more from the year before it? Recent figures actually showed pretty negligible change (actual loss of 100 jobs) earlier this year from one month to the next. I guess 2.8% is a “boom” when you’re coming off being the only province to lose GDP in 2006! This is still the most under reported significant data this year. Data. From Stats Canada
May 12th, 2009 at 3:56 PM
I’m an Architectural Technologist or draftsperson, basically do the drafting for architects. I’ve worked the majority of my career in SK and knowing my fellow drafters in firms making $17 an hour after 10 years is insanity. Although i’m not ‘comparing’ to alberta specifically, i did have a job interview for ‘the home office’ in edmonton for the company i was working for in Regina. I knew i was under market value at the time in Regina and they would just not budge. One review was performance review, the other was a wage review. On the performance review, everything was stellar, i was a valuable member of the team, contributed countless amounts and so on. By the time the wage review came up, the attitude changed conveniently to ‘you do adequate work and have lots of room to grow’.
From that point i went for the interview in edmonton, where they told me what they would pay usually in a starting position which at that time was late $20′s an hour. I got offered the position with my portfolio and such. When i brought up wage they mentioned that they talked to the office in Regina (which they weren’t allowed to do according to thier own human resources department) and told me that becuase i was ONLY making $17 an hour in regina, that i must have a lot to learn or they would have been paying me more, so edmonton offered to pay me the exact same wage in edmonton. I turned them down and let HR know what practices they did.
Long story short, a person can get screwed anywhere, be it here or there, it all depends on the companies. I would wager though that with more companies and more competition and more need in the bigger communities, there is a wider range of companies to apply for and to pick and choose from so that one CAN get a wage they are worth.
I applied at another firm in the city, no names, they wanted me right away. Wanted to pay me $17.50 an hour at most which would be a 3 dollar drop approx from what i’m currently making. They tried to make it up by sayign i could work all the overtime i wanted…
I turned them down and when they asked why? I told them that is no way to run an architectural firm…like a restaurant…where you can pay your people peanuts and expect them to live off the tips..the other people working there may accept that but i’m sorry i’m worth more than that.
Sorry for the long winded blab.
May 12th, 2009 at 3:56 PM
Jesse you should definitely check around Edmonton with other companies, I’ve got a buddy doing drafting there and he gets 25 an hour, I’m sure he’s good at what he does, but seems to have a pretty average job and there were lots of options when he went looking. No guarantees they’ll treat you better, but the average for stuff like that is way higher in Etown, probably Calgary too, but I would just be guessing.
May 12th, 2009 at 3:56 PM
Thanks dan for the heads up. I know I will be leaving this province somewhere around 2010 (gf in school until then) so i will keep it all in mind.
May 12th, 2009 at 3:57 PM
Norm,
Well I’m glad we agree then!
May 12th, 2009 at 3:57 PM
I don’t know the answers to your questions Jim, but it seems the Sask economy is headed in the right direction, that’s good enough for me.
May 12th, 2009 at 3:58 PM
Well, I guess if right direction is up, Saskatchewan is headed in the right direction, otherwise, you’d be disappointed that the amount it’s going up is pretty minimal.
May 12th, 2009 at 3:58 PM
Real Estate in Saskatchewan should double within the next couple of years.
May 12th, 2009 at 3:58 PM
No no no! It’s going to quadruple! No no multiply by 10! no! 100!!!
May 12th, 2009 at 3:59 PM
More good news:
Newfoundland, Saskatchewan enter ‘new era of prosperity’: StatsCan
http://www.canada.com/vancouversun/news/story.html?id=03a079ec-a8a3-4f98-9e5a-a99abbd628a1
May 12th, 2009 at 4:00 PM
The thing i never will get…of course new era of prosperity…anything is UP when you start at ZERO…
Everywhere else that has a good strong economy has had it for years and years and yet we’re paying more for housing because we’ve went from 0 to something.
May 12th, 2009 at 4:01 PM
He actually said, “Moron”. heh!
I just came a cross this “blog” and found it a fascinating read. There are always “opinions” on what stats mean and the extremes. Is the glass half full or half empty? The bigger question is what do we do now?
My experience is that it is almost always better to get “into” the market. Even if prices are high, interest rates are decent. It is hard to look at such a major investment as a house in short term – we need to be looking 10 – 20 years down the road.
I got in the market in October 2006 – If I had waited even 8 months I would be in something drastically smaller. But you have to start somewhere, or just stay out – your choice. And that is the economics of our society – it is a big business led democracy.
May 12th, 2009 at 4:01 PM
Steve,
Thanks for the visit and the comment. I’d say that you got in at exactly the right time. Congrats!