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Sask. housing market “cooling” as interest rates rise

The tight real estate supply conditions are supporting price increases in Saskatchewan while prices fall in many cities across Canada, a new report states.

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Rising interest rates are having a “cooling” effect on the Saskatchewan housing market, according to a new report by the Saskatchewan Realtors Association.

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The report, issued Thursday, indicates sales for July “eased” to 1,439 units, which means a year-over-year decline of nine per cent. That said, the report is quick to point out that 2021 was a record year for sales and the 2022 year-to-date sale of nearly 10,000 units is still well above “long term averages” for the province.

New listings are also down, but the report states that the “pullback” in sales has outpaced the decline in new listings, bringing the market into more “balanced conditions.”

The association’s CEO Chris Guérette says interest rate increases have caused buyers to seek out more affordable options.

The challenge will be product availability in the lower price ranges of the market,” he said in the release.

“Supply levels are improving compared to earlier in the year, however, the year-over-year decline in inventory has been driven by homes priced below $400,000.”

Supply conditions remain “tight,” the report states, noting “with less than five months of supply, the market is still experiencing the tightest July conditions since 2009.”

The tight supply conditions are supporting price increases in Saskatchewan while prices fall in many cities across Canada, the report states.

The “benchmark price” for July is listed at $335,100, which the report says is slightly higher than the month previous and over five per cent higher than July of 2021.

Moving forward, further rate increases are expected as concerns over inflation persist in the market,” Guérette said in the release.

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In Regina, 2,379 units have been sold, year-to-date — up one per cent over “last year’s record pace.” Inventory levels in the city are 13 per cent lower than last year’s levels, according to the report.

Sales in Saskatoon trended down this month, adding to a year-to-date decrease of almost 11 per cent.

“While sales have eased, that was relative to record high levels and with over 3,000 sales so far this year, levels are still over 20 per cent higher than long term trends for the city,” the release said.

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