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With the Bank of Canada hiking its key interest rate to 4.25 per cent, Saskatchewan home buyers are going to feel it.
“First and foremost, it’s going to impact buyers,” said Chris Guérette, the CEO of the Saskatchewan Realtors Association (SRA). “Your purchasing power has been reduced, essentially.”
Guérette said this will likely mean people will have to re-evaluate their expectations for what they can or want to buy or put their plans on hold entirely. While it’s hard to tell how many people will do either of those options, the SRA CEO expects an impact.
The association reported inventory levels are more than 25 per cent under the 10-year average in Saskatchewan.
Those levels are a key indication, and it’s one the association watches the most, Guérette said. The numbers essentially indicate how much is out there in terms of homes.
Guérette likened it to shoe shopping, where someone is seeking a specific type of shoe. Lower inventory levels limit someone’s selection for size, style and other specifications or preferences.
Compared to a home, where people are seeing a specific size, amenities or location, Guérette said watching inventory levels is important to consider because individuals can move in and out of home ownership based on what they require or what they need at a certain point in their lives.
Healthy inventory numbers are crucial, and looking at the 10-year trend is the best way the SRA can pinpoint that rather than year to year.
Inventory levels are also a balance of how many buyers are out there compared to sellers and a way to determine months of supply. In Saskatchewan, that number is still below the 10-year average by about 30 per cent — 33 per cent in Saskatoon and 20 per cent in Regina.
“Regina seems to have less of a challenge with inventory,” Guérette observed.
Saskatchewan’s numbers are concerning, Guérette said, noting the numbers were made worse during the pandemic.
The organization said 934 sales were recorded across the province in November, down 32 per cent from last year’s record high. That downward trend in sales is still exceeded by the lowering inventory levels.
Activity this year is still 16 per cent above long-term Saskatchewan trends, though. Guérette added it’s important to note that Saskatchewan has not been experiencing the lows other parts of the country have been seeing in the housing markets.
“We will see some buyers not really willing to dabble so much in the market until they have more certainty,” she predicted.
The month of supply is up now but Saskatchewan is seeing total residential benchmark price going up, indicating a lot of market activity is still happening, according to Guérette.
A 1.7 per cent increase over last year means the average home is around $321,000 today in Saskatchewan. Saskatoon saw a 2.7 per cent increase, compared to Regina’s increase of 0.6 per cent.
Guérette’s tip is to focus on the local market buyers are contemplating buying in rather than paying too much attention to the province as a whole.
“What is really smart to do is to take a look at the local levels,” she said, given that housing real estate is a very local endeavour.
Taking time to dive into the Regina, Saskatoon, Prince Albert or other community markets is where Guérette said real differences can be noted and applied to what someone is looking for.
“Educating yourself on that local market is what’s going to be important,” Guérette emphasized.
The SRA CEO said market activity is happening, though it does slow in November and December, in part thanks to the colder temperatures and holiday preparations,
“We’ll see what 2023 will hold,” she said, “but right now I think we still see a very healthy market.”
