Information summarized from CMHC Housing Market Outlook Fourth Quarter 2009
Saskatchewan’s economic expansion will likely grow by 2.1 percent in 2010. The unemployment rate is projected to peak early in 2010 before declining to 5.3 per cent.
With respect to the natural resource sector, lower oil and natural gas prices have reduced overall drilling activity. In addition, potash prices, which peaked at the end of 2008, have been on a downward trend since the beginning of 2009. As a result, there has been a reduction in investment and employment in the potash industry. As the global economic recovery takes hold, commodity prices will rise and help to support economic growth for Saskatchewan in 2010.
With respect to demographics, net migration is expected to rise modestly in 2010, and this will be a factor supporting housing demand. Accordingly housing starts will move up to 4,350 units in 2010.
Single Starts: Single starts will return to growth in 2010 reaching 3,050 units. A reduction in single housing starts in 2009 and steady absorptions have significantly lowered supply, setting the stage for an upswing in 2010. Modest price gains compared to recent years and in some cases, price reductions, have also helped to encourage demand.
Multiple Starts: 2010 will see an increase to 1,300 units. The reduction in starts has served to reduce supplies in Saskatoon.
Resales: MLS® sales in Saskatchewan will increase this year to 10,300 units while 2010 will see a further up-tick to nearly 11,000 units. Overall, home buyers returned to the market in the third quarter of 2009, drawn by low mortgage rates, slower price increases and an abundance of choice.
Prices: The average MLS® price will rise in 2010, but at a pace well below the double-digit increases experienced in 2007 and 2008. Although the inventory of active listings is trending down in Saskatchewan’s largest centres, a generous supply of listings still remains, encouraging more competition between sellers. This will ensure moderate price increases going forward.