CEO of Sask. Realtors Association seeing little change in Saskatchewan’s housing market

Despite pushes from both the provincial and federal governments, which have included incentives and grants, not much has changed for Saskatchewan’s housing situation.

Chris Guérette, the CEO of the Saskatchewan Realtors Association, joined The Evan Bray Show on Monday to discuss the market and why she says a recent report from Wahi, a digital real estate platform, claiming that growth in Regina’s housing market has come to a halt, should be taken with a grain of salt.

Read more:

• Fate of million-dollar, over-height Saskatoon home to be decided by city
• High demand, low inventory squeezing Saskatchewan housing market
• Saskatchewan shows record house sales in June

Listen to the full interview or read the transcript below:

This transcript has been edited for length and clarity. 

EVAN BRAY: Are you aware of this report that I’m referring to?

CHRIS GUÉRETTE: I am, but there are a lot of reports out there, and we have to take them with a grain of salt. The first thing I always do is think, “Is this somebody local who really does understand the boots-on-the-ground reality?” and we’re not looking at a report here that provides a lot of context of where Regina has been.

So let’s talk about the Saskatchewan market as a whole. Where are things today with housing, Chris?

GUÉRETTE: Demand is very strong, and it’s putting a lot of pressure on inventory. When that happens, it puts upward pressure on prices. The last statistics that we published were for the end of June, and really our inventory is still under significant pressure. What we’re seeing in Saskatchewan compared to the rest of the country is we’re really rewriting our housing market story compared to the rest of Canada. We are still that place in Canada where demand is strong and prices remain strong, consistent and continue to rise.

Is it all homes? I mean, this is a pretty broad topic, Chris. Are we talking entry-level versus luxury homes? What about urban versus rural? Is it across the board, the pressures?

GUÉRETTE: The pressure is felt throughout all communities. However, the difference is really between the different price points. So when we say we have an inventory crunch, it’s really an inventory crunch based on price point. So anything under $500,000, that’s really where you’re going to see that product move quickly. But you’ve heard me say before that housing is extremely local, and so you’re going to see some realities between Regina, Saskatoon, Humboldt, Melfort and smaller communities where you’re going to see a difference between condos and single-family homes. But at the end of the day, that dream of home ownership with that single-family home is still a very popular housing type.

There are so many factors that play into this. I was just chatting the other day with someone who’s aware of some building that’s happening in a couple of small communities where they’re building almost duplex-style homes with one bedroom on a slab, no basement, and I thought right away, “This is probably for people working at a nearby mine.” They said it’s actually seniors. It’s people who are wanting to downsize. So even that plays into this.

GUÉRETTE: Seniors are staying in their homes longer, and that’s certainly adding to this story, because if they’re staying in their very large family homes for longer than they used to maybe 20 years ago, those large family homes are not going back on the market like they used to, so it’s creating that pressure. We call that a filtering effect. When people move into a smaller property or buy something more expensive, it releases another home onto the market, and that adds to the inventory. So people are living in their homes significantly differently than they did five years ago because of the pandemic, but certainly 10 or 20 years ago as well.

I’ve read a couple of articles when it comes to housing and real estate, and people are referring to the boom-and-bust market. So you’ve got a crunch. There’s not enough housing. All of a sudden there are some incentives. There’s a flurry of home construction, and then all of a sudden the market is saturated and you’ve got the adverse effect. Are we still a ways away from that? Are we still in need of new-home construction?

GUÉRETTE: Absolutely. We typically don’t have the boom-and-bust market here in Saskatchewan. We may think we do, especially when we see communities in Regina and Saskatoon all of a sudden feeling the pressure. I read a really great article over the weekend describing Saskatoon as sometimes being an awkward teenager. We need to grow really fast, but I still wouldn’t describe that as boom-and-bust, because I compare that to other provinces and other large centres in the country. When I see a boom-and-bust market, I see a very sharp increase in prices, and then I also see sometimes that crash. We don’t see that in Saskatchewan. We have a very resilient real estate market, and that’s important because you want your real estate market to be a place where people invest and where the everyday Saskatchewan family invests, and it’s a really sound investment for their future. That describes Saskatchewan really well. No boom and bust. However, do we need more homes built quickly? Absolutely.

Have we seen some new builds incentivized by things like the secondary suite incentive? There have been a few ways in which the government has tried to incentivize building. Is that working?

GUÉRETTE: Is it working? Yes. Is it working enough? That’s the question. But yes, we have the secondary suite incentive, and let’s remember, Evan, that we will not really be able to know if it’s working because it’s not being tracked on websites such as Rental.ca or elsewhere. The only numbers you’ll see are from the large corporations. But the vast majority of housing providers in Saskatchewan are small individuals who have one, two, three or maybe five units, and they don’t track that anywhere. So a lot of the secondary suite incentives we track with the permits have been very popular. That means they’ve been very successful, and they’re adding gentle density in our neighbourhoods. So there’s that one. But let’s also not forget we have a PST rebate for new builds as well, specifically for the affordability component. So if you’re building a luxury home, that’s not necessarily going to apply, but if you’re building an affordable home, you’re going to get a PST rebate as well. Then there are also ways to keep our youth in Saskatchewan through incentives to put a down payment on a new home. Those are all really great incentives. Is it enough? Last year I would have said “Yes. Let’s give this a try.” Today I’m noticing that the pressure is even higher, probably because our population is going to keep growing, and we’re probably going to need to take a look at some other incentives.

How much does population growth – and I’m not just talking about immigration, but in some cases people moving back home to Saskatchewan, and in some cases just population growth happening across Canada – impact this whole topic of home ownership and real estate?

GUÉRETTE: It’s a huge factor in any residential real estate statistics that we take a look at, and a really fun number that I’ve come across recently is that 30 per cent of Canadians live in a province in which they were not born. So think about the investment in the province. You, as an individual, grow up, your government and your society contribute to your education and your degrees, and then you pick up and go elsewhere, often starting a family. So really, the movement of a population in a country is something that we have to digest a little bit better, because even we ourselves have a large chunk of our population that we’re investing in. But you know what? They’re picking up and going elsewhere. We also know, through various surveys from various think tanks across the country, that the majority of people who are living in unaffordable centres such as Vancouver and Toronto, if they had a job in a more affordable centre, they would move. So that’s an untapped opportunity for us. But at the same time, we also need to have a plan to grow sustainably with housing.

I’ve heard it suggested before that this market right now, given the fact that we’re low on inventory, is perfect for realtors. I don’t think so. I’ve got a couple of friends who are realtors, and I feel like they would like to have a bit more of a balance. Is there a perfect balance?

GUÉRETTE: Well, that is definitely not the reality. When there’s a shortage of inventory, that means professionals representing their clients have to work so much harder to find something, and that means more effort, more time, sometimes going months without being paid until they find something for a client. So it’s definitely harder out there. But this is definitely the time to lean on professionals, because they know exactly what it takes to find a property in this type of market. Absolutely. But no, more inventory means members of the public are more successful in finding something, and that means it’s also a little bit easier for realtors to navigate those markets as well.

Is there any kind of way that you can measure and say “If we can achieve this level for a city our size, in Saskatoon or Regina, that’s probably a good number of units to have on the market?” Is there a measurement that helps understand where the sweet spot is?

GUÉRETTE: There’s a very general one, and then there’s a more specific one. That’s why we always calculate the months of supply. That means if there was no new product coming on the market, it would take that number of months to erode what was available to buy. So we say that a balanced market is between four and six months of inventory. Keep in mind, you always have to take a look at the reality and history for a municipality, a community and the housing type you’re looking at. I’m giving you some very general numbers, but you really have to also rely on your expert. But four to six months is really considered a balanced market. Saskatoon is sitting at 1.5 months. Regina is sitting at 1.6 months. We’re talking about weeks here. It’s not comfortable. A couple of months ago, there were some communities that had 22 days of supply, so we’re starting to count in days now, and that’s not comfortable.