Some houses are going $100,000 over the asking price

Hello Flatlanders,

Across Canada, real estate markets exploded during the pandemic because of low interest rates; and people were not spending money on travel or on social events so they decided to put that extra cash into a house instead.

According to this CTV report Vancouver, Toronto and Hamilton were more expensive housing markets than Los Angeles. Ottawa, which was the sixth most expensive city, was more costly than living in New York City. The Maritimes market, as well as Calgary, became expensive too.

But the Saskatchewan and Manitoba housing markets, relatively speaking, have remained sane. Although sane does not mean without problems for buyers wanting to get into the market.

Prices are expected to keep going up even though homes in Regina and Saskatoon are already expensive, according to a Royal LePage house price survey.

The average house price in Regina is $361,200, an increase of 11.8 per cent over the first three months of this year; and in Saskatoon prices have gone up 10 per cent. There have been some reports of bidding wars in Saskatoon, but so far that doesn’t seem to be the norm.

Nationally, the aggregate home price increased to to $856,900, an increase of 25.1 per cent in the first quarter, so Saskatchewan is still relatively affordable to first time buyers than say Toronto. If you’re curious, here’s what you can get in Regina in the $800,000 price range.

A supply problem is what is causing high prices, said experts. Inflation made the cost of building expensive, so there isn’t much of that happening now.

A huge real estate company collapsed in Saskatoon. Epic Alliance Inc., which owned about 500 properties, worth about $126 million, collapsed in January. There’s a court-ordered investigation into the matter, which is expected to wrap up this month.

Epic had 120 investors from B.C. and Ontario who were offered a rate of return of about 15 to 20 per cent. You can read about it here, but the long and the short of it is the company was built atop a house of cards as new investor money was used to pay out previous investors.

The 500 houses owned by Epic haven’t flooded the market yet, although some have sold, according to the Saskatchewan Realtors Association. It’s thought the rest of the houses could be put up for sale after the lawsuit around Epic Alliance works out, which could create a buyer’s market.

The Epic programs. Epic had a “fund a flip” program where they bought and flipped properties with loans from security holders. Another program was called “hassle-free landlord” where investors would buy flipped houses in exchange for a passive income while Epic handled landlord duties.

There were 100 Epic-related eviction cases since 2019, according to the Rentalsman, and that only counts the ones that made it to a hearing. The rents on Epic properties were often raised to a point where many tenants couldn’t afford them, especially during the pandemic.

Small-town Saskatchewan’s also seen a real estate boom. Houses in Canora, for instance, can sell within a day. The fastest selling houses are under $100,000. Canora is a short driving distance to Yorkton and is more affordable than the city. 

Meanwhile in Manitoba, Scotiabank found the province has the third-lowest per capita amount of homes per population. The province would need 23,000 units to bring it up the national average of homes per person.

There were fewer new real estate listings in 2021 than in 2020 in Manitoba. Even so, last year 19,672 residential properties sold, up 17.2 per cent over the 2020 year-end record of 16,789 sales.

Annual housing sales were worth $6.56 billion in 2021, up 28.6 per cent over the previous year-end total of $5.1 billion.

There were 23,995 new listings throughout 2021, which was down 1.4 per cent from 2020 and the average sale price of $333,841 was up 9.8 per cent.

Home sales are a major contributor to the Manitoba economy. According to the Manitoba Real Estate Association (MREA), the 2021 housing market generated over one billion dollars in economic spinoff activity, like spending on moving costs, furniture, household appliances, home renovations, and legal services.

Low resale inventory is limiting market activity this year while demand for homes is pushing prices up.

March home sales were down compared to the record-breaking month one year ago. Activity continued at a high level with 1,519 residential properties trading hands and total sales reached $578.3 million, down 24.7 per cent and 15.3 per cent respectively from last March.

The median price of a single-family detached home increased 11.4 per to $425,600.

Sixty-seven per cent of homes sold for over list price this March, up 14 per cent from the same period in 2021.

The Manitoba housing market had been stable over the last 10 years before the pandemic, as price and sales increased between two per cent to five per cent annually.

Bidding wars can happen over some properties that can receive as many as 20 offers.

Homes can end up going for $100,000 above asking price in Winnipeg and/or require $20,000 in renovations.

The home buying experience was financially overwhelming for 51 per cent of Manitoba respondents, according to one survey.

Five stories from Manitoba you may have missed

1. You have to have a boat’: Flood battles continue throughout Manitoba and across U.S. border
2. New venture capital fund in Manitoba to be more independent from government
3. Manitoba launches new guidelines to incorporate Indigenous knowledge in classrooms
4. Court challenge to Manitoba’s homegrown cannabis ban argues province going against Ottawa
5. Manitoba will have lowest minimum wage in Canada this October after Sask.’s hike to $13/hr

Five stories from Saskatchewan you may have missed

1. Want to buy an electric vehicle in Saskatchewan? It could take a year
2. ‘It was awful’: Spring migration has begun and fatal bird strikes are on the rise
3. After weeks of moisture, drought conditions ease in parts of Prairies
4. Husky Oil fined $600K for releasing harmful substance into Saskatchewan waterway
5. Sask. doctors are tired, demoralized and considering quitting: survey

Photo of the week

Until next week…

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Thanks for reading, and kind regards,

Kelly-Anne Riess