A lot is happening early in 2016 with the global economy, whether it is the price of oil or the free fall of the Canadian dollar. Consequently a lot of Saskatoon home owners are wondering what the forecast is like for the Saskatoon real estate market in such uncertain times. Being a Realtor, you always get asked the question by friends, family, or in the hockey dressing room, ‘what’s the market like?’. Over the holidays, all things real estate always slow down and that usually follows with a bout of bitterly cold weather which keeps people inside and gives them a reason to binge watch shows like ‘Making a Murderer’ on Netflix. With that said, over the past 3 weeks we have seen numbers actually improve when compared to numbers from early January 2015.
According to the Canadian Mortgage and Housing Corporation (CMHC), there are some things to look out for in the coming year:
- Housing starts will decrease in 2016 and ramp back up in the beginning of 2017.
- Prices will increase slightly in 2016 to and rise again more dramatically in 2017. The average absorbed price for a new single-detached home in Saskatoon is forecast to rise modestly from $455,000 in 2015, to $462,000 in 2016.
- After hitting a 32-year high of 1,954 units in 2014, multi-family starts in the Saskatoon CMA, are forecast to decline 19.4 per cent to 1,575 units in 2015. While there has been an increase in demand in the past year for lower-priced options such as condominium apartments, a slower pace of employment growth and net migration will moderate demand for multi-family dwelling types moving forward. This will lead to a reduction in multi-family starts to 1,550 units in 2016.
- Vacancy rates for rental units will climb from 3.5% to 3.9%
- Mortgage rates may rise slightly, however they should remain historically low.
- Higher listing inventory will provide more choice in the resale market and also contribute to a decline in housing starts.
- Less move-up buyers in the market.
I have heard some positive news here, from a Globe and Mail article which states that foreign investors have their sights set on Saskatoon. Regardless of the oil & gas industry taking a major hit, Saskatoon looks promising to investors in the agriculture and timber markets. Foreign investment could bring more money to the Saskatoon area and stimulate our economy.
Ultimately when someone asks me about the market, I tell them a few different stories. If you have a developed re-sale home, you can most certainly achieve top dollar. However, if you have a condo, townhouse, or new home, it’s likely a different story.
If you’re looking for some guidance during these uncertain times, don’t hesitate to give us a call!