The average selling price of a Canadian home has appreciated 264 percent over the last 25 years, according to a new study.
That amounts to an annual increase of 5.3 percent, not bad given the fact that a home is an “investment” which brings the added benefit of shelter to owners. Of course, value gains on principal residences in Canada are tax-exempt making a home that much more attractive as an investment.
The study, just released by Remax Real Estate examined increases in the average selling price of a home in 17 housing markets across Canada, including Saskatoon.
Lately, it seems that everyone is talking about the heat of the Saskatoon real estate market so you may be surprised to see that Saskatoon showed the second smallest increase (148%) of all of the markets surveyed. This doesn’t strike me as a huge surprise. Over the long-term, Saskatoon has pretty much always shown slower growth than most other Canadian markets. Typically, we’re accustomed to gains in the range of 3 to 4 percent but that trend has started to change in recent years. In 2005, prices increased by nine percent. In 2006, the average price of a Saskatoon home rose 11%. As I’ve mentioned in previous posts, our current levels of low inventory and high demand could, and probably will bring increases which exceed those in 2007.
So what’s changing in this area? First of all, our whole provincial economy looks entirely different than it did 10 years ago when Saskatchewan was largely dependent on agriculture.
Today, we are quickly becoming a leader in natural resources with heavier production in oil and uranium. Some believe that diamonds will be the next big thing for Saskatchewan if Shore Gold continues to pull stones as they have been lately. Science has also played a pretty significant role in the Saskatchewan economy over the past five years.15 years ago, our children had to leave Saskatchewan to find work. Today, a multitude of jobs and affordable housing is luring them back home.
My money says that we’ll see Saskatoon playing catch up with the rest of the country over the next few years.
I’m always happy to answer your Saskatoon real estate questions.
Royal LePage Vidorra