Posted: Thursday January 6, 2022
Saskatchewan set a housing sales record with 17,387 sales in 2021, a new high which surpassed the previous record in 2007 by 17 per cent. While the pandemic has triggered vast disruptions and challenges for some sectors of the economy, housing boomed.
“Improved savings from those not financially impacted by COVID-19, combined with low lending rates has supported the strong sales environment we saw throughout 2021. For Saskatchewan, this shift was welcome news as the economic landscape pre-pandemic caused challenges in the housing market,” said SRA CEO, Chris Guérette.
While new listings did improve this year, inventory levels still trended down throughout most of the year. 2021 inventory levels in the province were 16 per cent below long-term trends, a significant shift from a few years ago where supply levels hit record highs.
Reductions in inventory and strong demand ensured the market favored the seller throughout most of the year. This resulted in an annual benchmark price gain of over seven per cent. While the price gains were significant, it was not enough to erase the losses recorded throughout 2015- 2019 and prices remain three per cent below the 2014 high.
There is also significant variation depending on property type and location. In Saskatchewan, single family home prices are only one per cent below previous highs, whereas condominium properties remain 17 per cent below the 2014 high.
“Housing is an important component to the overall economy and the availability of affordable ownership options can help attract people to a city. Creating a robust system of affordability metrics that considers supply, average salaries and housing prices is something policy makers should be incorporating into their analysis,” said Guérette.
Despite recent economic uncertainty caused by the Omicron variant, inflationary pressure is expected to persist, and lending rates are expected to rise. This will weigh on housing sales in 2022. However, we are entering the New Year with low levels of inventory indicating it will take some time for the market to shift toward more balanced conditions.
With tight conditions expected to persist throughout the earlier part of the year, we could continue to see some price growth in 2022 albeit at a much slower pace than was experienced in 2021.
Regina also reported record high sales in 2021. However, Regina inventory levels have not declined as much as in Saskatoon. Inventory levels in 2021 declined by four percent on average, but levels remain consistent with long term trends. This in part is due to the significant gain in new listings in the market. While this market did not necessarily see the same supply challenges as Saskatoon, conditions were still far tighter than anything seen since 2013. The tight conditions did support price growth this year. On an annual basis residential prices improved by six per cent. The gains over the past two years were not enough to offset the losses recorded in earlier years and prices remain below the 2013 annual high.