The real estate market continues to rise
Real estate markets, including in Prince Albert, continue to improve, the Saskatchewan Realtors Association (SRA) said Thursday.
The association sent out its monthly home sales report, which showed more homes were selling for more after spending less time in the market.
The latest data showed the city’s sales volume increased 51.5% from last May, from $ 8.2 million to $ 12.5 million. Sales volume in the greater Prince Albert area increased even more.
Since the start of the year, sales are up 100% in the city and 115% in the region.
The data also shows a 17% decrease in the average length of stay of homes on the market. Around the same time last year, most homes had been on the market for 90 days. Now it’s down to 75. The five-year average is 78.
At the same time, the HPI (Home Price Index) benchmark, which measures the average price of a single-family home, rose 15%, from $ 163,400 last May to $ 188,100 now. That’s a few thousand dollars more than the five-year average and almost $ 10,000 more than the ten-year average.
Regionally, the median home price is up 21% year over year and is about 7% above the five and ten year averages.
Yet the city’s HPI remains low in the province, with only Melville reporting a lower HPI benchmark price. The HPI is only available for 15 of the 24 geographic areas in the province. The May report shows 13 of those 15 cities and towns with an increase in the HPI.
Other jurisdictions, including regional data, use the median price instead. The median price of homes in the Prince Albert area is in the middle of the pack, well below Regina and Saskatoon and their areas, but above small areas and communities.
In total, 23 of the 24 jurisdictions saw their median home prices increase in May 2021.
Strong demand with declining inventory levels means prices continue to rise, the SRA said.
“The markets have gained momentum since last May when some pandemic restrictions were lifted,” said Chris Gbekorbu, SRA economic analyst.
“At some point things have to start to stabilize,” he continued, although the SRA report noted that market indicators seem to indicate maintaining the current pace.
It is not known what effect, if any, the new mortgage rules will have on the housing market. The last time loan regulations were tightened, sales and prices fell just over 1%, but continued to rise.
The new mortgage stress test rules come into effect on June 1. The minimum allowable rate for uninsured mortgages, which are those with a down payment of 20 percent or more, will increase to the contract rate plus two percentage points or to 5.25 percent, whichever is greater.
Currently, any buyer with a down payment of at least 20% of the purchase price must show that they can afford payments if the interest rate is two percentage points higher than that offered by the bank or at the five-year benchmark rate of 4.79%. , whichever is greater.
The rules will also apply to mortgages with a down payment of less than 2%.
In a press release, the Office of the Superintendent of Financial Institutions said the rate will support financial resilience if economic circumstances change.
“In a complicated and sometimes volatile housing market, the need for good mortgage underwriting cannot be underestimated,” they said.