(The Canadian Press)

By paNOW Staff

INTEREST RATES

Interest rates still impacting Sask. housing market despite latest Bank of Canada decision

Sep 6, 2023 | 5:00 PM

While a new report shows the national housing market could soften this fall, Saskatchewan could buck the trend, especially with interest rates holding steady.

A new Re/Max Canada report released this week forecasts the country’s real estate market will soften this fall with average home prices predicted to remain flat as the housing market deals with high interest rates and a lack of homes for sale.

In the fall outlook report, released on Tuesday, Re/Max predicts there will be a few outliers where home prices are expected to increase, including the Greater Toronto Area, Calgary and Sudbury, Ont.

According to Saskatchewan Realtors Association (SRA), CEO Chris Guerette, the market in the province has been resilient.

“This is the tightest market conditions we’re seeing heading into September since 2007,” she said. “Because we are seeing some exceptionally low inventory available for people looking to buy, that means that we’re going to see a market that is going to perform the same way we’re seeing right now.”

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Guerette does not anticipate any drop in prices coming up but instead the possibility of prices slightly rising soon.

According to the latest Market Report from the SRA, Saskatchewan home sales rose 11 per cent year over year last month. However, year-to-date sales dropped about seven per cent.

(Saskatchewan Realtors Association)

Guerette also touched on the recent interest rate decision from the Bank of Canada and how the high rates have affected the market.

On Wednesday, the central bank announced it was holding its key interest rate steady at 5 per cent, its highest level since 2001.

Guerette said the interest rates mean fewer people can purchase a home or move into the real estate market and that some are selling their properties in favour of something more affordable.

According to a survey that accompanied the Re/Max report, 33 per cent of Canadians polled who were interested in buying and/or selling a home in the next 12 months said they would wait and see how interest rate changes play out.

Half of the survey respondents, or 51 per cent, said further interest rate increases this year would not change their financial situation or affect their plans to buy or sell a home.

The online survey of 1,517 Canadians was done by Leger between July 21 and 23, with a margin of error of +/- 2.5 per cent, 19 times out of 20.

While the Bank of Canada hinted at the possibility of further interest rate hikes, Andy Hill, a mortgage broker and co-founder of ratefilter.ca doesn’t anticipate any hikes soon but wonders when the rates will go down.

“I think that we will probably start to see some cuts by 2024 but by much and when in 2024 is kind of anybody’s bet,” he said. Hill noted that the average Canadian mortgage is around $350,000 but with every rate hike of .25 per cent means an additional $70 or more per month for mortgage payments.

According to the Canadian Real Estate Association, the average home price in Saskatchewan for July was just over $305,000, a drop of two per cent from the same time last year.

–With files from the Canadian Press

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panews@pattisonmedia.com