SASKATOON, Jan. 13, 2016 /CNW/ - The aggregate1 price of a home in Saskatoon rose 1.2 per cent year-over-year to $375,370 in the fourth quarter of 2015, according to the Royal LePage House Price Survey2 and Market Survey Forecast3 released today.
Broken out by housing type, the median price of a bungalow rose 2.1 per cent year-over-year to $373,383. Two-storey homes saw modest growth of 1.4 per cent to $452,483. Condominium prices met some softness, declining 4.3 per cent year-over-year to $238,619.
"The drop in crude oil prices has had less of an impact on the area's housing market than many people had anticipated," said Matt Miller, associate broker, Royal LePage Saskatoon Real Estate. "The main factor contributing to price trends in this region is the high inventory of houses and condominiums, partially due to new construction. Overall, Saskatoon is currently in a buyer's market situation, resulting in numerous options for ready purchasers."
Looking ahead, Miller predicts that Saskatoon house prices will remain relatively flat in the coming year, and that the market will remain a buyer's market until inventory levels begin to decrease.
Nationally, Canada's residential real estate market showed strong growth in the fourth quarter of 2015, led by hot Vancouver and Toronto markets. Looking forward to 2016, Royal LePage expects continued price increases in most markets, but not at the pace that has been the recent norm. Instead, the national real estate market is expected to slow later this year, principally due to the effects of a dampened economy in Western Canada and eroding affordability in Toronto and Vancouver.
The price of a home in Canada increased 6.5 per cent year-over-year to $500,688 in the fourth quarter. The price of a two-storey home rose 7.7 per cent year-over-year to $610,134, and the price of a bungalow increased 5.4 per cent to $420,082. During the same period, the price of a condominium increased 3.1 per cent to $341,448. Looking ahead to 2016, Royal LePage forecasts that the median price of a home in Canada will increase at 4.1 per cent for the full year when compared to 2015.
"The frenetic pace of our country's largest housing markets should moderate throughout the year ahead," said Phil Soper, president and chief executive officer, Royal LePage. "While most of the country will continue to see house value appreciation in 2016, we expect that the pace of price increases in the Greater Vancouver and the Greater Toronto Areas – where real estate appreciation has significantly outpaced job and wage growth – will settle to a more sustainable, single-digit price increase trajectory."
In 2016, Royal LePage expects the price of residential real estate in Canada to be more heavily influenced by macroeconomic factors than by housing-specific variables such as tighter regulation in the mortgage industry. The Bank of Canada is expected to keep its overnight rate steady through the all-important spring market, extending the prolonged period of exceptionally low borrowing rates. While the new Federal Minister of Finance kicked off his appointment with a hike to 10% in the minimum down payment required for the portion of mortgage insurance over $500,000, Royal LePage expects this change to have a marginal effect on the overall market.