The average price of a standard condominium in Saskatoon saw the largest growth, with an increase of 2.9 per cent to $261,333. Meanwhile, detached bungalows increased 1.6 per cent to $375,000 while standard two storey homes rose just 1.3 per cent to 399,250.
"We saw the strongest price increase this quarter in the condo segment, in large part due to a higher percentage of newer units having sold," said Norm Fisher, sales manager, Royal LePage Saskatoon. "Detached bungalows saw a slight increase in average price due to a lack of units available, while standard two-storey homes saw just modest increases because of surplus supply, which is the highest we have seen since 2009.
According to Fisher, prices are more stable due to a combination of factors that include a slowdown in immigration, which had been fuelling the Saskatoon market, and a slowing potash sector.
Looking ahead to the remainder of 2014, Fisher forecasts the continuation of stronger than normal demand for housing while increased residential inventory levels keep prices from rising further.
“We have now passed the spring rush, which is traditionally followed by a period of slow but steady declines in unit sale numbers as we approach year end, so average prices are likely to be on par with 2013 prices by the end of the year.”
Nationally, with the harsh winter now a fading memory, the average price of a home in Canada increased between 3.9 and 5.2 per cent in the second quarter of 2014. According to Royal LePage, price increases were posted across housing types, with detached bungalows seeing the highest year-over-year gains, rising 5.2 per cent to an average price of $406,454. Meanwhile, standard two-storey homes rose 5.1 per cent year-over-year to $440,972, while standard condominiums posted gains of 3.9 per cent to $258,501.
"Chronic supply shortages are driving price spikes in Canada's major cities, masking otherwise moderate home price appreciation nationally," said Phil Soper, president and chief executive of Royal LePage. "While a widening affordability gap in Canada's largest urban centres is characterizing the national market Canadians read about daily, year-over-year house price increases in most regions of the country are presently tracking below the historical average."
Looking ahead at the remainder of 2014, Royal LePage is projecting that the national average house price will increase at 5.1% per cent for the full-year. "Compared to other major forecasts, our year-beginning national outlook predicted a higher level of 2014 average price appreciation, yet supply constraints in a handful of our largest cities necessitate a revision upwards," noted Soper. "Looking ahead to 2015, we expect house prices to track more closely to the rate of general economic growth. That is, we see price increases in Canada's largest cities moderating, just as our smaller city markets should see a lift."