I’ve been babbling for months about the relative affordability of Saskatoon’s housing market, despite strong sales and limited listings.
Someone else has finally taken notice.
Western Investor, the Western Canadian business magazine, just listed the top five (yes, western) cities in which to buy investment real estate. Saskatoon was number four, after Edmonton, Terrace and South Delta, B.C., and ahead of Lethbridge.
“Saskatoon makes our go-to list for 2024 for its steady demand, affordable prices and potential returns in retail, multi-family and industrial real estate,” the magazine said.
It noted that Saskatoon has high household incomes, an average home price among Canada’s lowest, and a “comparatively low” average rent of $1,075 for a one-bedroom apartment.
Saskatchewan will have two per cent growth in GDP next year, “among the leading provinces during a muted year,” according to the Conference Board of Canada, it added.
The board, it continued, “notes strength in agriculture and mining and, right on cue, the $7.5 billion BHP Jansen mine — biggest potash mine on earth — has started north of Saskatoon with a promise of 2,500 jobs.”
That information is already a bit dated, mind you. BHP started building the mine 140 kms east of the city some time ago, is about one-third through the first stage, plans to start production in 2026 — and just announced a $6.4 billion phase two development on top of its original $12.4 billion investment.
There’s no doubt this is a huge project that will influence Saskatchewan real estate in all three sectors — and already has. BHP has a significant office footprint in downtown Saskatoon.
How many BHP employees will rent or buy property in the city remains to be seen, and of course 2024 is still crystal ball territory; but one can assume there will be an effect going into 2026, at least.
And so far, there’s no sign of property sales languishing, even as we move into fall and winter, nor much of an easing in the rental market.
In October, Saskatoon recorded 382 home sales, 20 per cent above the same month in 2022.
New listings rose somewhat — 0.6 per cent to 513 units — but that didn’t help much. Inventory was the lowest it has been for October since 2007, one of the wildest years in Saskatoon real estate history.
At 899 units, inventory is down almost 24 per cent from last October and 45 per cent from the 10-year average. That leaves us with 2.35 months of supply, down almost 53 per cent from 10-year averages.
The tight market put upward pressure on the benchmark price, unsurprisingly, which rose to $382,700 from $381,900 in September and four per cent over last October.
On the bright side, government policy at both the federal and provincial levels may bring some new rental inventory to a market with a very low vacancy rate.
Chris Guérette, CEO of the Saskatchewan Realtors® Association (SRA), pointed to the federal government’s recently-announced GST rebate for purpose-built rental apartments; and the province has reintroduced the PST rebate on certain properties while also providing support for building secondary suites.
“Those three components together, we are hopeful will add some inventory,” she said.
“It was important to provide that tax relief for purpose-built. (Builders) need to find a way to minimize the risk. They need to know if they’re going to dive into more investment, they’re going to be okay.”
Governments could go further, she added.
“The material to build a home is relatively the same throughout the country. The major difference is the land … and taxes and fees.” The last two items account for 20 to 25 per cent of the price in Saskatoon.
Still, she predicts we will see more building now that taxes have been reduced.
In other news, and in a nation-wide first, the SRA has brought in a new piece of artificial intelligence software that it says will make searching for a new home easier for everyone … and help realtors create better listings faster.
Created by Restb.ai, an American company specializing in AI-powered computer vision, the software automatically adds information to property photos uploaded to the Multiple Listing Service.
“You have to have pictures when you list property,” Guérette said. “You list, say, 10 pictures and then you have to take the time to identify them (by room). Right now, you don’t have to add descriptions for the rooms.”
The new software automatically categorizes the photos and provides descriptions, which are then checked for accuracy by the agents.
A second phase, coming in early 2024, will do the same thing for the overall property description.
Guérette said one of the consumer benefits will be accessibility. She gave the example of a home buyer with vision impairment. Because the descriptions come with “alt text,” people can hear them by using screen reader software.
Once the system is more populated, it will also enhance searchability. For example, if a home buyer prefers white kitchen cabinets, the system will sort for that— along with price ranges and double garages, for instance.
The website must be populated with information first, so it will be a little while before people start to see and hear a difference.
“This is the first foundational piece with the pictures,” she said.
“We’re going to move as fast as we can. On the public end you won’t see a lot of benefit at first, but it will grow quickly.”
Joanne Paulson is a Saskatoon author and freelance journalist who has been covering real estate, off and on, for more than 25 years. Do you have a fascinating real estate story to share? Get in touch at [email protected].
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