The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year price increases for all three housing types surveyed in Saskatoon.
Standard two-storey homes posted the largest gain of 7.3 per cent, selling for a second quarter average of $379,500, over the same quarter in 2011. Detached bungalows saw a 6.0 percent increase over the same quarter last year, selling for an average of $351,125. Standard condominiums sold for an average price of $255,667, a 5.6 per cent year-over-year increase.
“This past year has been a big year for migration to Saskatoon and it’s reflected in our house prices,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “Last year was a good year for market activity and we are seeing a 10 per cent increase over last year’s level this quarter.”
Fisher also noted that inventory for all three housing types were down, particularly detached bungalows.
“We are seeing some multiple offers, but even in those instances the selling price is usually only marginally higher than the listing price,” added Fisher. “Despite, the spurred market activity, buyers are being cautious.”
Nationally, in the second quarter, standard two-storey homes rose 4.7 per cent year-over-year to $408,423, while detached bungalows increased 5.5 per cent to $376,311. Average prices for standard condominiums increased 3.3 per cent to $245,825. During this period, signs from across the country clearly indicated that the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.
“We have had three years of solid house price appreciation in almost all regions of the country,” said Phil Soper, president and CEO of Royal LePage Real Estate Services. “Confidence in Canada’s real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates.”
The first-time buyer segment of the population, which represents up to half or all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.
“The most recent set of mortgage changes, the fourth in four years, is also the most aggressive. The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord. The timing of this intervention was unfortunate,” added Soper.