Construction is happening in Prince Albert, but almost none of it is single-family homes. (File Photo/paNOW)

By Susan McNeil

Real estate strong

P.A. housing supply drops as prices increase

Oct 5, 2023 | 5:03 PM

Single-family homes still appear to top the wish list of home buyers in Prince Albert.

That’s according to September’s report from the Saskatchewan Realtors Association.

There were 51 sales with the benchmark price sitting at $253,400.

“It was another strong month of sales in Prince Albert and area with 51 sales in the City of Prince Albert, that’s 46 per cent higher than last year,” said Cole Zawislak, Director of Public Affairs and Communications for the Association.

Despite high-interest rates, people are still buying and still wanting a single-family home if they can afford it.

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At the same time, new listings remain down 30 per cent over last year, a trend that has been continuing for a while and is happening across the province.

This graph from the Sask. Realtor’s Association shows the growing gap between supply and home prices in Prince Albert. (Sask. Realtor’s Association)

In September, 53 new listings were added with inventory now sitting at 177.

“That translates to months of supply of 3.47 in the city of Prince Albert, which is down 50 per cent year over year and nearly 61 per cent vs the 10-year long-term average,” said Zawislak.

Realtors consider six months to be a healthy supply, so Prince Albert is sitting at just over one-half of that.

Despite the lack of supply, the city is not seeing a corresponding surge in new single-family homes being built.

Zawislak estimates that to is a result of high interest rates, increased materials and building costs along with inflation rates.

Prince Albert City Council is considering incentives to stimulate construction, the latest of which is a $10,000 grant for homes built on lots that have been empty for longer than three years and are privately owned.

“I think any type of incentive to get more homes built should be welcome news in Prince Albert and across Saskatchewan as well,” Zawislak said.

That money is coming from another change last year that more than doubled the base tax on vacant lots from $700 annually to $1,600.

Construction is happening, but it is almost all commercial, industrial, or involves multi-family residential units.

Recently, the federal government announced they would not charge GST on specific types of new construction.

“The GST announcement around purpose-built rentals was certainly welcome news but that said, that’s only one piece of the housing continuum,” Zawislak said. The GST elimination applies to the construction of multi-family rental units.

He said more action is required, though Premier Scott Moe has made no commitments to follow suit despite Prime Minister Justin Trudeau’s urging that all provinces should drop their taxes as well.

“The feds have signaled they’re not done, so we’ll wait and see what they’ve got up their sleeves,” Zawislak added.

Several purpose-built initiatives are also underway in Prince Albert, but most buyers are still hopeful of owning their own place.

“I think definitely if folks are able to afford and those homes are available, single family is certainly the preference,” Zawislak said.

Row houses and apartment-style units are popular however and the realtor’s association has noticed increased sales of apartment buildings.

“Anytime interest rates rise, people have to re-calculate what they can afford,” Zawislak explained.

Of the 51 sales in Prince Albert in September, 44 were detached or single-family homes.

Across Saskatchewan, the amount of properties has grown, as has the price, with several exceptions such as Regina, Moose Jaw, Swift Current, North Battleford, and Meadow Lake.

Regina saw strong numbers of sales, but the price of the properties sold was reduced.

In Saskatoon, 14 per cent more homes were sold and the community reports only 2.6 months of supply, the lowest level since 2007.

“Provincial prices remain stable as price gains in Saskatoon, Prince Albert, and Yorkton offset price declines in Regina and Swift Current in September,” said Association CEO, Chris Guérette.

“Ultimately, real estate is local, and conditions vary across the province. That said, supply challenges in the lower-priced, more affordable segment of our market remain a significant concern provincially.”

The Sask. Realtors Association is anticipating that signs of the slowing economy in eastern Canada will not be felt as strongly to the west.

“Many are forecasting a downturn nationally, but a lot of those same folks are also saying that the Prairies, and obviously that applies to Saskatchewan as well, are well-poised to buck that trend,’ Zawislak said.

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susan.mcneil@pattisonmedia.com