Buying a home in Saskatoon is more expensive than ever

Buying a home in Saskatoon is more expensive than ever. Housing prices have hit at an all-time high, and inventory is at its lowest since 2008, pushing prices further up. 

All different property types, including detached homes, apartments and townhouses, reached all-time high prices in March, going up around $5,000 in value every month over the last year, according to real estate experts. 

The Home Price Index benchmark tracks the sale price of specific types of properties over time. It's the real estate equivalent of the CPI (consumer price index).

On average, the four property types have risen in value by almost eight per cent compared to March of last year, 37 per cent compared to five years ago, and 218 per cent compared to 20 years ago.

Low inventory

As of April 23, there are only 425 available units that don't already have a conditional offer accepted. That's about a month's worth of inventory. 

"If no new homes were listed for the next month, there would be no inventory left within a month. Everything would be sold out in a month at that rate," said Josh Buchanan, a real estate analyst.

He says it's really difficult for those wanting to enter this competitive housing market due to a lack of inventory and high prices leading to bidding wars. 

Some homes in Saskatoon have been sold for $100,000 over the asking price, and others were being sold anywhere between $30,000 to $50,000 over asking price, with bidding wars driving prices further up. 

Almost 70 per cent of homes sold in Saskatoon in April were purchased at or above the asking price, according to a real estate expert. 

"Even if they [first-time homebuyers] could afford to get in the market, it's like they're just getting outbid. So they're just getting priced out of the market or just giving up," Buchanan said. 

He said there just aren't enough homes in Saskatoon to meet the demands of its growing population. 

No luck for first-time homebuyer 

Abdullah Abrar, 25, moved to Saskatoon from Lloydminster, Sask., with his family a few years ago. They've been in the market since last summer with a $500,000 budget for a house, but haven't had any luck finding one. 

"It's frustrating because we were renting at the moment, and we were looking last year too, so we're just trying to get something soon," Abrar said. 

He said most new homes being built won't be ready this summer, and what's on the market is too overpriced. The only option he has left is extending his rental lease and hoping for better luck next buying season. 

"We looked at a house over in Brighton that was like $420,000 and now it's $470,000, in less than a year," he said. 

Abrar said even if he finds a place he's interested in, there's a lot of pressure to make an offer and buy within a day. 

"You're spending like half a million, you're in it for the next 20 years or so of your life. It's frustrating. You have to be quick on your decision, and it could turn out good or it could turn out bad," he said. 

Abrar says right now he is helping his family buy a home in the city. He wants to settle down in Saskatoon and start his own home-buying journey, too, but that dream seems to be slipping farther away. 

Rising rents and affordability 

Experts say the unbalanced housing market is also impacting the rental market.

Inesh Rai, a Saskatoon realtor, says many renters who want to become homeowners can't find a home they can buy. They're losing on multiple offers they make and, like Abrar, being forced to give up and continue renting. 

"That's increasing demand on the rental market. Rents are going up as well because more people are giving up on buying," Rai said in an interview. 

He fears that Saskatoon and Saskatchewan may not remain as affordable as they've been in the past. 

"When my family and I first moved to Canada, we were in Ontario for the first four or five years, and there was no chance in hell we were ever gonna put our foot through the door, buy a house," he said. 

They moved to Prince Albert, Sask., where Rai grew up, and where his parents were able to buy their first home because of the affordability that Saskatchewan offered. 

"I'm terrified that that affordability is going away," he said. 

What can homebuyers do? 

Rai said you should get a pre-approved mortgage so you know what you can afford and make an offer quickly. 

He suggests going to a local real estate professional and asking them what is the best chance you have of getting accepted in this market, and to make your offer quick and desirable. 

Buchanan said that the solution to this unbalanced housing market is to build more housing. 

"I think there needs to be strategies for construction. I like the idea of building multi-unit complexes that attract young working professionals without kids and retired individuals who maybe don't have kids at home anymore." 

He said that Saskatoon needs at least 1,000 additional units to balance out the market but that won't happen overnight, so the city stands to see high prices and cutthroat bidding wars for some time at least.