Canada’s prairie provinces lead the charge for housing affordability

Is Canada experiencing a national housing affordability crisis or a regional crisis? Many headlines dominating national newspapers suggest the whole country has become unaffordable. While British Columbia, Ontario and even Atlantic Canada have seen price increases and record sales, Canada’s Prairie provinces have led the charge on housing affordability.

Alberta, Manitoba and Saskatchewan offer plenty of opportunities for young families to own a home without breaking the bank or having to spend decades saving a down payment.

You do not believe it ? Let’s take a look at some recent real estate statistics to see how these three provinces facilitate an environment where many households can buy residential property without fighting in auction wars or borrowing more than they can realistically afford.

Canada’s prairie provinces lead the charge for housing affordability

Alberta

The Alberta real estate market is still on track for a record year amid a recovery in the oil and gas sector and a national economic recovery. But the housing market continues to strike a delicate balance between growth and affordability, attracting both buyers and homeowners.

The average selling price of all home types edged down 0.359% to $ 415,821 in September, although valuations were higher than a year ago, according to the Alberta Real Estate Association (AREA). At the same time, residential sales fell, new residential listings fell, and the sales to new listings ratio (SNLR) remained stable.

In addition, new housing construction paused in September, according to Canada Mortgage and Housing Corporation (CMHC). Housing starts fell to 2,152 in September from 2,165 in September 2020. However, year-to-date housing starts have reached nearly 22,000, compared to 15,729 in the first nine months of 2020.

Manitoba

supply is down, but so are demand and prices. Welcome to the beautiful (and very accessible) province of Manitoba.

According to Manitoba Real Estate Association (AERM), the average selling price of a residential property fell 4.29% month-over-month to $ 332,056 in August (the most recent market data available at the time of the writing). It comes as home sales fell 17.19% month over month in August, to 1,738 unit sales.

Will the fresh supply hit the market soon? New residential listings fell 10.64% to 2,259 units. However, home construction is on an upward trajectory, with housing starts soaring to 719 in September, from 285 in the same period a year ago, according to CMHC data. Year-to-date housing starts have surpassed 5,000, compared to 3,928 in the first nine months of last year. This is good news for buyers in the Manitoba housing market.

Saskatchewan

The province of Saskatchewan has attracted many out-of-town buyers looking for more affordable housing options. Although that province has seen notable price increases since the start of the pandemic, it has stagnated month over month.

According to Saskatchewan Real Estate Association (SRA), the benchmark residential property price was $ 287,900 in August 2021 (the most recent data available at the time of writing), which is relatively unchanged from the previous month.

While other regions have experienced a drop in supply, Saskatchewan has seen its inventory levels hold steady, although they are still at their lowest level in seven years. That said, easing sales brought the number of months of inventory up to seven. This metric refers to the time it would take to clear current inventory at the current rate of sales.

Residential development is on the rise in Saskatchewan, with starts rising to 545 in September, up from 150 at the same time a year ago. In total, housing starts since the start of the year are approaching 3,000, compared to just over 2,000 during the same period last year.

“Activity can vary greatly depending on location and type of property. For example, looking at the two largest cities in the province, house prices have recovered in Saskatoon while there remains a significant gap from 2012 levels in Regina. For buyers and sellers in this market, it is important to understand the local conditions”Said Chris Guérette, CEO of the Saskatchewan REALTORS® Association, in a press release.

A regional housing strategy?

In the 2021 federal election, all major political parties proposed strategies to address the housing issue nationally. But John Carter, broker and owner of RE / MAX River City, said to Edmonton Journal that Ottawa needs to focus on presenting regional solutions to tackle the housing problem, alluding to Alberta’s capital, Edmonton, recently ranked fourth most affordable city in the country.

Federal level must work with provinces and large municipalities on a collaborative approach to develop strategies that will actually work,” he said.

Indeed, industry watchers warn that NIMBYism and slow approval processes are preventing an increase in supply that would help ease sky-high property prices across the country. Considering this is a matter for provincial and municipal governments, the federal government will not have much of a say in changing zoning or local development bylaws.

Does that mean it’s time for City Hall to ramp up rather than leaning on Parliament Hill? If the Prairies can maintain housing affordability for many Canadians, other jurisdictions could as well.

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