Standard condominiums posted the largest gain of 7.4 per cent, selling for a third quarter average of 252,333. Standard two-storey homes rose a modest 4.1 per cent year-over-year to 373,500, while detached bungalows saw a 3.9 per cent increase over the same quarter last year, selling for an average price of $348,000.
“Limited inventory and increased demand have pushed prices up throughout the region, which has especially been seen across standard condominiums priced between the $200,000 - $300,000 range,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “Despite this, there is still a good selection available for homes priced above the $400,000 mark.”
Fisher noted that healthy migration levels and strong consumer confidence in Saskatoon’s local housing market have resulted in healthy market activity this quarter. Although new mortgage regulations slightly impacted unit sales for properties priced below the $400,000 price range, established immigrants, first-time buyers and move-up buyers are still very much active in the marketplace.
“Overall, our local economy is doing very well and buyers are eager to get into the housing market while interest rates are still low,” explained Fisher.
Nationally, the average standard two-storey home in Canada increased 4 per cent year-over-year rising to $403,747, while detached bungalows rose 4.8 per cent to $366,773. Standard condominiums witnessed an increase of 1.8 per cent to $243,607. Most cities in Canada experienced modest price appreciation in the quarter, but fewer homes were sold compared to the same period in 2011.
“A drop in the number of homes trading hands typically precedes a period of softening house prices. Where there is reduced demand, those who want to sell their homes adjust their asking price to stimulate interest. Home sales were positive in July, fell 9 per cent year-over-year in August and we are expecting September to show a decline as well,” said Phil Soper, president and chief executive, Royal LePage. “We had predicted this cyclical change early in the year, a natural market reaction after a period of strong expansion. Changes to mortgage regulations, which took effect on July 9th, accelerated the correction.”
In July, the Minister of Finance announced that the maximum amortization period for insured mortgages would be reduced to 25 years from 30 years. This was the fourth intervention in just four years and the most impactful. Potential first-time buyers, which in a typical market represent one third to one half of all purchase transactions, felt the changes immediately.
“While hard-hit in the short-term, we expect first-time buyers to adjust to the tougher mortgage qualifications. The dream of homeownership is very much alive among young Canadians. They may remain renters for some time as they save; some will opt for less expensive neighbourhoods and some will purchase smaller homes,” added Soper. “In the meanwhile, we will feel their absence in national sales statistics.”