RBC Economics released their Housing Trends and Affordability report for February of 2016 this week. They had this to say about Saskatchewan’s major real estate markets.
Saskatoon - Navigating in choppy waters
Saskatoon’s housing market managed to contain its losses as it navigated through fairly choppy waters in 2015. Home resales fell by 13% last year to a four-year low of 5,215 units; however, prices stayed above water and registered modest gains overall. Buyer sentiment was seriously tested by a surge in Saskatoon’s unemployment rate, which reached an 11-year high (6.4%) by the year-end 2015. At the same time, the market worked through elevated levels of unabsorbed units following strong housing construction in the previous two years. Demand-supply conditions softened gradually but consistently, such that buyers gained the upper hand during the second half of the year, and point to increasing price weakness in the period ahead. Meanwhile, housing affordability continued to trend sideways in 2015. RBC’s aggregate measure was little changed on the year but edged downward marginally by 0.1 percentage points to 32.7% in the fourth quarter—effectively matching the long- term average of 32.3%.
Regina - Soft market conditions sustain improving affordability trends
These were also challenging times for the Regina market in 2015. Not only did the number of homes sold in the area fall by 8.1%, but also prices followed a modest downward trajectory during the year. While the local job market held up better than in Saskatoon, slowing population growth and elevated levels of unsold new homes kept demand-supply conditions quite soft in Regina. At the margin, housing affordability might still be a slightly restrain- ing factor for buyers—given that it remains a touch poorer than the area’s historical norms and still recovering from sharp deterioration during the 2007 –2008 interval—however, it is unlikely to be the dominant force weighing on the market at this stage. RBC’s aggregate measure continued to trend lower in 2015, posting a 0.4 percentage point decline in the fourth quarter to 28.3%. We expect this improving trend to persist in the short term.