Saskatoon new home prices up from July but down from August of last year
Statistics Canada’s new housing price index for August 2009 shows modest increases of just 0.1% from July to August in Saskatoon, and across the nation. On a year-over-year basis, the price of a new home in Canada fell 3.1% in August when compared to the same month last year. The decrease in the cost to build was more than twice that in Saskatoon, or 7.6% lower than it was a year ago, while new home prices grew 1.8% in Regina.
New house prices took their greatest tumble in Edmonton where the cost to build a new home fell 11.4% from last year. Victoria followed at -10%. Vancouver was down 7.8%. Calgary was off by 6.3%. St. John’s led on the plus side showing increases of 7.5%.
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Norm Fisher
Royal LePage Saskatoon Real Estate
11 comments so far. We'd love to hear your thoughts.
October 14th, 2009 at 10:19 PM
More about the recent bond yield increase/fixed mortgage rate hike story:
Mortgage rate hike could cool housing rebound
http://bit.ly/3zKaxz
“By raising their mortgage rates and making it more expensive for customers to borrow money for a home, the banks are effectively throwing some cold water on residential real estate. That, in turn, might allow the Bank of Canada to keep its short-term rate unchanged as pledged.”
It’ll be interesting to see where this goes in the next few months.
October 15th, 2009 at 8:19 AM
It’s nice of the banks to be thinking of us in that way.
Seems to me that some release of steam is warranted, particularly in markets like Toronto and Vancouver where most, if not all of the affordability gains made through the recent correction have been lost.
October 15th, 2009 at 9:46 AM
What strikes me on that chart is where Saskatoon sits relative to all other major Canadian cities in the price of a house (comparatively) since 1997. With the Canada-wide index at 53% higher, Saskatoon is almost 112% higher — behind only Regina and Calgary.
Granted, some of that is definitely due to the fact that a similar absolute rise (say, $100k) across the country leads to wildly differing percentages … but the fact is that housing has become more than twice as expensive in this province in the last 12 years — 2.5x as expensive in Regina. I know for a fact that my salary has not increased by 112% in 12 years… so therefore, my standard of living has de facto gone down compared to 1997-me.
October 15th, 2009 at 6:21 PM
Good point Bookrat.
Is it possible that the price of a new home in Vancouver is only 14.5% higher than it was in 1997? That’s how I’m ready this but it sounds messed up to me.
October 15th, 2009 at 8:41 PM
In terms of cost per square foot I think Canada is still looking pretty good compared to many jurisdictions. Please note the special article on Canadian real estate.
http://www.globalpropertyguide.com/
October 15th, 2009 at 9:58 PM
“Is it possible that the price of a new home in Vancouver is only 14.5% higher than it was in 1997?”
What seems even weirder, Norm, is that average new build in Vancouver could have declined by 7.8% from August 2008 to August 2009, which is more than half of the total percentage of change we’ve seen since 1997 by this chart. Victoria’s stats just look impossible- a new home is now 3.5% less than 1997? If true and I had bought a new home in Victoria in 1997, I would be significantly cheesed. I was looking through the data sources and methods for the information thinking I had to be misinterpreting what the base value was, but didn’t find anything. Here it is- hopefully someone smarter and/or more alert than me can figure it out
: http://bit.ly/3TX4Kk
Could it be that this data is pertaining to only new homes (vs. resales)? The fact that builders knew they could charge a premium during the “boom times” (and may have in fact had higher construction costs), combined with the fact that builders have more recently offered significant incentives to sell? I’m not sure that would account for this much of a rate of change either- just guessing here.
On another note, this S-P ran this yesterday:
Provincial economy takes hit from strong dollar: http://bit.ly/14XmzZ
“The rising Canadian dollar and continued uncertainty around potash are further pieces to the puzzle of the province’s finances as the government prepares to announce spending cuts Friday and begins deliberations on next year’s budget. With the government dealing with cratering potash revenue, Saskatchewan Party Finance Minister Rod Gantefoer is casting a baleful eye towards the soaring loonie as it approaches parity with the U.S. dollar.”
October 16th, 2009 at 9:02 AM
Jen, you’re right and I missed it, but it’s right there at the top of this page: “[T]he price of a new home in Canada fell 3.1% in August….”
So I suppose if we’re looking at Stonebridge vs. whatever was being built in 1997, it makes sense that people are paying more… Norm, what areas were being developed around that time?
October 16th, 2009 at 10:59 AM
Bookrat,
“Norm, what areas were being developed around that time?”
Silverspring (late) and Arbor Creek (early).
Jen,
As Bookrat stated, this index is only for new house prices, and I presume based on the notation towards the top of the first column (1997=100) that the base value is 100. The Victoria and Vancouver number seem completely odd to me. The average price of a detached house in Vancouver was slightly below $400K in 1997. It’s somewhere just below $900K today.
October 16th, 2009 at 3:10 PM
Received this note from one of my Royal LePage contacts working in Victoria. She has provided resale statistics, which I understand could differ from the new house trend, but I would think that the difference would be marginal. New homes and resale homes tend to maintain some kind of balance over time. Norm.
Yes, that stat is definitely wrong.
Here is a link to our Real Estate Board’s stats page.
I have attached a graph showing the average sales prices between 1967 and 2008. It seems to me that the average price of a home in Greater Victoria has risen from $248,921 to $583,701 which is 234% of that original value – wow!
October 16th, 2009 at 5:39 PM
I don’t have access to the New House Price index going that far back. However, the Real Estate Board of Greater Vancouver compares prices over time using the HPI (House Price Index). Over the course of that period (from September 1997 to September 2007) a detached home in Greater Vancouver went from a base value of 100 to 244.
It would appear likely that there is an error in the data that Statscan is using.
October 16th, 2009 at 7:53 PM
Thank you Sebastian and Naomi. Appreciate you sharing your expertise.
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