Prices for detached bungalows saw a healthy increase of 5.2 per cent to $369,250, while prices for standard two-storey homes increased by 3.9 per cent to $394,250. Condominium prices, in contrast, dropped by 0.3 per cent to $255,000.
“Our strong local economy and low unemployment rate are driving population growth, which is in turn leading to decreased housing availability,” said Norm Fisher, broker of Royal LePage Saskatoon. “The decreased number of available properties has spurred a number of multiple-offer scenarios, with as much as 30 per cent of listed properties selling at or above asking price.”
Royal LePage is forecasting moderate price increases for the remainder of the year. “The buoyant job market in Saskatoon will keep prices and unit sales strong for the balance of 2013,” said Fisher. “Expectations of interest rate increases may also contribute to higher activity, as buyers try to get into the market in advance of rate hikes.”
Nationally, in the second quarter, standard two-storey homes and detached bungalows both showed a year-over-year average price increase of 2.7 per cent to $419,614 and $386,547, respectively. Average prices for standard condominiums showed a more modest increase during the same period, rising 1.2 per cent to $248,750. Royal LePage forecasts that house prices will see modest gains throughout the remainder of 2013, projecting a 3.0 per cent increase for the full year when compared to 2012.
Dialogue concerning the direction of Canada’s housing market has remained front and centre in recent months. Changes to Canada’s mortgage lending rules in mid-2012 coupled with concerns about consumer debt levels, housing affordability in cities like Toronto and Vancouver and continued international economic uncertainty have prompted a number of analysts to forecast large downward price adjustments.
“As we have stated consistently since the current market downturn began late in the second quarter of 2012, this is a normal cyclical correction which brings fewer home sales and softer prices. Those hoping their predictions of a bursting bubble and cataclysmic drops in home values will come true are out of luck again,” said Phil Soper, president and chief executive of Royal LePage. “Price appreciation in most markets across the country has been well below the long-term average for Canada and will remain so through to the end of the year. We expect to see the number of homes trading hands to begin to rise slightly on a year-over-year basis in the second half of 2013, with price softness continuing until mid-2014, at which point we’ll see an emergence from the current cycle.”