The Prairie real estate market stagnated for years, especially in Manitoba and Saskatchewan. Alberta enjoyed a robust housing industry, thanks to its two major urban centres – Edmonton and Calgary – and its energy sector. But everything changed a couple of years ago when a whole host of Prairie cities and towns posted meteoric gains.
But with rising interest rates and market uncertainty, is this still the case? While it might be too early to declare a downturn, the common theme in many Prairie markets is that prices continue to remain elevated, despite waning sales activity.
So, what are currently the three hottest Prairie real estate markets to invest in today? Here are the cities that are doing well during the downturn in the broader Canadian housing market.
Three Hot Prairie Real Estate Markets to Invest In
#1 Red Deer, Alberta
According to the Alberta Real Estate Association (AREA), residential property sales slipped just 2.5 per cent year-over-year in August, totalling 154 units. But the modest price growth has been the attractive component of the Red Deer real estate market, buoyed by broader market tightness.
In August, the total residential average price rose at an annualized pace of 2.8 per cent to $338,850. But while prices continue to be healthy, dollar-value performances among the different property categories have been mixed, association data revealed.
- Detached Average Price: +9.2 per cent to $394,765
- Semi-Detached Average Price: -2.6 per cent to $279,018
- Townhome Average Price: -8.7 per cent to $208,329
- Apartment Average Price: +15 per cent to $193,655
Housing supply may have contributed to the decline in semi-detached and condominium prices in August. Indeed, according to the AREA, new residential listings fell 14.8 per cent year-over-year to 224 units. Active residential listings tumbled 23.4 per cent to 523 units. Months of inventory, which measures the number of months it would take to exhaust current levels at the present rate of sales activity, slid 21.4 per cent to 3.40.
However, new housing construction activity has been on the decline this year, with housing starts totalling just 11 in July, according to Canada Mortgage and Housing Corporation (CMHC). Year-to-date, housing starts have totalled 87 units.
#2 Winnipeg, Manitoba
Tightness in the Winnipeg real estate market is beginning to loosen. Although price growth has eased amid rising interest rates, average prices remain elevated. Winnipeg Regional Real Estate Board (WRREB) statistics highlight that number tumbled 11 per cent in July to $400,000. But here is a key number: The year-to-date average single-family home selling price advanced by $431,158.
A similar trend can be found in the condominium market. While the condo average price dipped 2.5 per cent month-over-month in July, the more comprehensive year-to-date average price surged more than eight per cent to $264,208.
“Housing options and choice are signs of a healthy local market, so to see condominiums doing relatively well in comparison to 2021, when sales were up 39% over the best previous year, is very positive,” said Akash Bedi, the 2022 president of the Winnipeg Regional Real Estate Board, in a statement. “On the other hand, sales activity is not faring as well for residential-attached properties, which decreased 32% in July 2022 over July 2021.”
In the broader Winnipeg housing market, home sales fell eight per cent, totalling 1,542 units. This is just three per cent lower than the five-year average for this time of the year.
“You just have to look back to July 2020 when there were close to 1,900 sales, and up until then, we have never seen this summer month eclipse 1,500 sales,” noted Bedi. “It becomes readily apparent how unusual July 2020 was.”
Once again, supply has been key in Winnipeg as new residential listings surged nine per cent to 2,359 units.
#3 Saskatoon, Saskatchewan
The Saskatoon real estate market in July can be summarized like this: prices are exceptional, and demand has subsided.
According to the Saskatchewan Realtors Association (SRA), MLS® Home Price Index (HPI) increased nearly nine per cent year-over-year to $331,400 in Saskatoon.
Residential property sales dropped 11 per cent, totalling 480 units. But it is worth noting that home sales in Saskatoon are 23 per cent above the five-year average.
Unlike other housing markets in the Prairies or the broader Canadian real estate market, the number of new residential listings surprisingly slipped 7.5 per cent to 758 units. This is 2.7 per cent below the five-year average.
Months of supply stood at five months, which is more than 34 per cent below the five-year average for this time of the year. Plus, days on the market was 41, down about three per cent from last year.
Can the Prairie Real Estate Market Sustain Its Growth?
Be it Saskatoon or Red Deer, the question is: Can the Prairies keep up? Some market analysts anticipate that segments of the Canadian real estate market that posted record-setting gains during the COVID-19 public health, such as Saskatoon and Winnipeg, would experience the sharpest downturn. So far, there has yet to be a crash or a notable decline in prices. For now, like Atlantic Canada, the Prairies are what might help the nation’s housing industry stay afloat in this rising-rate climate.