With residential real estate inventory above benchmark levels, average home prices in Saskatchewan showed year-over-year declines of 5.5 per cent, but increased 2.2 per cent in the first quarter of 2009. According to Royal LePage’s quarterly House Price Survey, the year-over-year value of key housing types – detached bungalows, standard two-stories and condominiums – were down 10.9 per cent in Saskatoon, while Regina home values increased 7.8 percent over last year’s average. However, most Saskatoon housing types showed increases in the first quarter of 2009.
“The decline in Regina’s housing market started in 2008 – later than some other cities – so we lagged behind other markets,” said Mike Duggleby, Manager of Royal LePage Regina Realty Saskatchewan. “However, average 2009 house prices have increased over last year.”
After posting price gains throughout 2008, Regina South’s housing market has seen little activity so far in 2009 – with average prices for detached bungalows up 21.9 percent year-over-year to $295,000, standard two-storey homes up 13.7 percent to $290,000 and standard condominiums up 12 percent at $196,500. In Regina North, standard two-storey home prices were unchanged from a year ago at $200,000, while bungalow prices were up 2.6 percent to $238,250 year-over-year. Meanwhile, condominium prices declined 3.6% year-over-year to $141,111.
According to Duggleby, Regina’s buyers are sitting on the sidelines. “People are waiting to pick up bargains,” he said. “They’re waiting to see if prices go down further. Right now, there is an over-supply situation.”
Despite a slumping global economy, Duggleby believes it won’t be long before the province’s vibrant resource and construction sectors help drive all residential real estate prices back up. “House prices are connected to our local economy,” he says. “Construction is starting on a global transportation hub that will take air, rail and trucking freight from Thunder Bay and Vancouver. Work is also starting on a new western Canadian distribution centre for Loblaws.”
Although Saskatoon home prices have dropped over the past year, values have started to rebound with average price increases of 3.5 percent for key housing types within the first quarter of 2009 (not exactly how I would have characterized the first quarter, but I did point out that average prices and cost per square foot increased in January and February).
Condominium values took the biggest hits year-over-year, with prices down 13.6 percent in Saskatoon North and a decline of 16.4 percent for condos in Saskatoon East Central. Across Saskatoon, the average price of a detached bungalow was down 8.1 percent year-over-year, to $312,500, while two-storey homes were down 11.8 percent to $348,500.
The number of homes in Saskatoon for sale in March – approximately 1,400 – was down from a peak of 1,800 last year – but current supply levels are still very high and well above average.
“Prices have seen downward pressure over the last twelve months,” said Norm Fisher, Sales Manager, Royal LePage Saskatoon Real Estate Ltd. “This is the first time in this particular cycle that we’ve shown year-over-year price declines – from 4.5 percent to as high as 16.7 percent in a standard townhouse in the West End. It’s definitely a buyer’s market.”
Most of the 2009 activity in Saskatoon has occurred in the lower priced housing categories. Home ownership has become more accessible, with an average first quarter house price of approximately $282,700 – down from last year’s peak of $318,300.
“Through 2007 and the first half of 2008, Saskatoon experienced the greatest deterioration of affordability in Canada, so we were due for a correction. We want our young people to stick around and build a future here. Some first time home buyers are starting to come back to the market because of low interest rates.”
At the other end of the spectrum, Fisher notes that very few of Saskatoon’s half-million dollar homes sold in the first quarter of 2009.
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Norm Fisher
Royal LePage Vidorra
