(File photo/Canadian Press)

By Jaryn Vecchio

More Expensive

Sask. housing market expected to take hit with rise in interest rate

Jul 13, 2022 | 5:00 PM

Buying a house just became even more expensive.

The Bank of Canada has raised its key interest rate by one percentage point to 2.5 per cent. This is the largest single rate hike since August 1998.

Chris Guérette, CEO of the Saskatchewan REALTORS® Association, told paNOW that this is just another blow adding to the skyrocketing gas and food prices.

“Affordability has taken a hit in recent months and individuals are feeling it, families are feeling it.”

Arguably, the rising interest rate will have the most impact on mortgages.

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Guérette noted property owners who have a $400,000 mortgage will have to pay around $200 more each month.

Whether this will deter some from becoming homeowners or cause an increase in foreclosures, it’s too early to tell.

The SRA is personally waiting for August and September, which are typically months that see more activity in the housing market, to see what happens.

“I’m not too concerned but we are keeping a sharp eye,” said Guérette.

If people do choose to buy, they will most likely have to pay above market value. The average price for properties is up across the province. In Prince Albert and North Battleford, the price is up four per cent when compared to the 10-year average, while in Melfort it’s up nine per cent.

Guérette explained inflation has little to do with the rise.

“There’s pressure on that inventory and that’s why we’re seeing that residential benchmark price increasing.”

Inventory in P.A. is down 35 per cent from the 10-year average and 39 per cent in Melfort. North Battleford’s inventory is currently on-par with previous years.

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Jaryn.Vecchio@pattisonmedia.com

On Twitter: @princealbertnow