Saskatoon - Strong buyer demand offset by above-average inventory
The Royal LePage House Price Survey released today showed little year-over-year change in Saskatoon house prices. Sales activity was up year-over-year, but an above-average supply of listings tempered price increases.
Detached bungalow prices increased 0.9 per cent, selling for a first-quarter average of $331,250. Standard condominiums sold for an average price of $239,333 – a year-over-year gain of 0.4 per cent. Prices for standard two-storey homes fell 1.7 per cent, selling for a first-quarter average of $360,000.
“In the beginning of 2011, our inventory was 30 per cent higher than the same period last year although current levels sit at 20 per cent,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “This has created significant competition among sellers.”
An over-supply of inventory helped create a buyer’s market, and Fisher believes mid-March changes to the mortgage rules helped boost sales by motivating first-time buyers to enter the market before the change took effect.
Nationally, low interest rates and a recovering economy continued to fuel activity in Canada’s housing markets over the past year, which has led to country-wide increases in average home prices. In the first quarter of 2011, the national average price of a detached bungalow rose 4.3 per cent year-over-year to $341,355, while standard two-storey homes rose 3.5 per cent to $379,388 and standard condominiums rose 4 per cent to $237,919.
“The rate at which Canadian homes are appreciating may well have peaked for the next year or so,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “We expect house prices will continue to creep up, but most of the excess demand created by the initial drop in interest rates has been satisfied, and affordability continues to erode slowly, allowing the listings supply to catch up. In most markets, lower single digit percentage increases are more likely for the balance of the year.”
“Canada’s real estate market has maintained momentum coming out of 2010, indicating that the post-recession recovery is continuing,” Soper added. “While low interest rates continue to drive demand, the tepid pace at which employment levels are improving is tempering the rate of home price appreciation in many Canadian cities.”
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Norm Fisher
Royal LePage Vidorra