BoC interest rate cuts could fuel already hot Sask. real estate market

Today’s half- point Bank of Canada interest rate cut to 3.75 per cent could add fuel to an already hot real estate market in Saskatchewan.

Cole Zawislak, public affairs and communications director with the Saskatchewan Realtors Association, said it was welcome news for prospective home buyers who have been on the sidelines, or looking to buy another home.

“Anytime there’s a decrease in interest rates we tend to see that transfer to a little bit more demand here in Saskatchewan,” he said.

But on the “flip” side, inventory in many Saskatchewan markets, especially those in Saskatoon and Regina, is at historic lows, and more people who are looking to buy or renew their mortgages could further make a tight market even tighter.

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Provincially, the Realtors Association has seen 15 consecutive months of above average sales, coupled with housing inventory that’s anywhere from 40 to 55 per cent below 10-year averages.

“We have very strong demand — record demand in some cases — paired with record inventory lows in a lot of cases. It’s something we haven’t quite seen in our province since 2007,” he added.

With lower interest rates, Zawislak also said it could potentially spur more instances where sellers are seeing multiple bids on their homes, especially those in Saskatoon and Regina priced below $400,000.

“Any time we see interest rates drop, that does tend to bring some folks off the sidelines and… that means more people competing for the same properties,” he explained.

Saskatchewan housing prices are among the lowest in the country, so a half point interest rate cut won’t “move the needle” quite as much as it might in larger centres like Toronto and Vancouver.

“I think it’s welcome news for any prospective buyer in Saskatchewan… it helps with folks looking to get into the market, but it’s not going to be earth — shattering,” he said.

He added that in the fall, the real estate market tends to slow a little bit, but it remains to be seen if there will be more people looking to list their homes.