Housing markets in Sask. and Alta. decline for 2nd year
Manitoba experiences growth for 3rd consecutive year
Low oil prices and a slowing economy have affected the housing markets in Saskatchewan's two biggest cities, according to the latest Housing Market Insight report released by the Canadian Mortgage and Housing Corporation..
Regina and Saskatoon
According to statistics from the Association of Regina Realtors, residential sales in the city for August are at "record levels" and have increased substantially over the same time in 2015.
There were 314 sales in the city during August — an increase of 21 per cent over the year before.
So far this year, there have been 2,031 sales in the city, a 4.5 per cent increase in sales over last year's 1,944.
The average sales price of a home in Regina in August was $314,494, which was a 1.7 per cent decrease from the same time last year.
Saskatoon, by comparison, experienced a six per cent decrease in home sales for the year-to-date.
According to stats on the Saskatoon Region Association of Realtors web site, there were 506 total sales in August 2016.
The average sales price of a home in Saskatoon in August was $346,371, which was a two per cent decrease.
Warman and Martensville have experienced declines in their housing markets as well. Martensville saw a seven per cent decrease in sales with 67 units sold.
Warman's sales decline was significantly higher at 52 per cent for the first five months of 2016.
Types of jobs
Dr. Jason Childs, an associate professor of economics at the University of Regina, said the difference in housing markets in Saskatoon and Regina is due to the types of jobs available in each city. .
Childs said Saskatoon typically has more private sector jobs while Regina has more government jobs.
"Those [government] jobs tend to be more stable over the economic cycle than private sector jobs," Childs said.
The decline in sales does not mean either city is shrinking, Childs said. The cities just will not experience growth at the same pace.
"The Saskatchewan economy does move in a commodity cycle," Childs said. "Right now, it's not a good part of the cycle for us."
In the case of Warman and Martensville, Childs stresses the base for the percentages has to be considered.
While a 52 per cent decrease sounds dire, it's in reference to a low number of houses.
Sales in Saskatchewan
According the CMHC Housing Market Insight (HMI) report, parts of Saskatchewan's economy have contracted and reduced housing demand.
There have been more than 7,000 sales in the province this year, which is a six per cent decline over the same time last year.
The buyers' market has helped lower the overall price of Saskatchewan homes by 1.6 per cent.
Portfolio diversification
An oil price shock, or a sharp change in price, contributes to the volatility of the economy, said Lai Sing Louie, regional economist for the prairies and territories for CMHC.
Louie said Alta. and Sask. are particularly vulnerable because of their reliance on the energy sector. Energy exports in Alta. are roughly 68 per cent, 23 per cent in Sask. and Manitoba's energy sector accounts for roughly seven per cent of its total exports.
Manitoba's export portfolio is more balanced, he added, with roughly 32 per cent of its economy based on government spending, such as infrastructure and community spending.
By comparison, he says the Sask. economy is 24 per cent government spending and Alberta's is just 18 per cent.