Sask. housing market recovering after COVID-19 sales decline

The Saskatchewan real estate market is showing strong signs of recovery after the arrival of COVID-19 sent gloomy sales forecasts to the industry.

June data released from the Saskatchewan Realtors Association (SRA) shows that many areas of the province are proving to be quite resilient to the pandemic.

Sales across the province rose nearly 50 per cent compared to June last year while year-to-date sales are down just 0.3 per cent, a sign that nearly all sales lost during the lockdown have been recovered, according to the SRA.

“We’ve seen properties in some markets sell within days of being listed,” SRA CEO Jason Yochim said in a media release.

“And we’ve even seen bidding wars start to break out.”

New listings were up almost eight per cent compared to June of 2019 and the average home price is up nearly two per cent.

All the statistics point to a buyers market in Saskatoon, according to RE/MAX Saskatoon’s Mike Gustus.

“The market’s not pretty good, it’s been excellent in June,” he said. “If buyers have to purchase a home or are thinking of making a home, now is likely a very good time to get started.”

Saskatoon’s sales rose 38.4 per cent compared to June of 2019, going from 372 to 515 this past month. Sales in the overall north region — which include Melfort, North Battleford and Prince Albert are up 42.7 per cent, going from 504 last year to 719 in 2020.

Gustus attributed the bump in sales due to two reasons: a couple of months of relatively low sales activity due to COVID-19 and tightening of mortgage insurance rules by the government-backed Canadian Mortgage and Housing Corporation (CMHC).

“People are ready to get out and do something,” Gustus said. “The other side of it is that the CMHC changed the rules effective July 1 that made it more difficult to get mortgages.”

Changes for borrowers who offer down payments of less than 20 per cent to access CMHC’s default mortgage insurance include a minimum credit score of 680 instead of the previous 600, as well as changes to the limit of gross debt of an annual income.

At one point, the CMHC was predicting sales to drop as low as 19 per cent across the country. Gustus said those figures focus on Canada’s major centres and don’t often reflect the sales market in Saskatoon.

COVID-19 has also had an effect on mortgage rates. Gustus is hearing of 25-year mortgage rates with a five-year term as low as 2.14 per cent in some instances, a significant drop compared to rates before the pandemic.

As homes continue to sell, prices aren’t skyrocketing, and that scenario can be good for buyers and bad for sellers as home prices in Saskatoon went from an average of $320,000 to $329,900 for an increase of 3.1 per cent compared to this time last year.

“I listed a couple of town houses in the last two weeks that sold the first day they were on the market,” Gustus said. “One lady just about panicked.”

While Gustus hasn’t seen bidding wars, he knows homes priced between $200,000 to $300,000 aren’t staying empty for long.

“It’s really hot right now. It’s hard to find a home in a price that range that’s been looked after,” he said.