Paulson: Sask. could lose competitive edge on home affordability

We and all three levels of government need to be aware of the complex housing issues we face and start thinking about the future.

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I’ve been chatting about the low inventory of homes on the Saskatoon market for months, and despite a few more listings entering the fray, this problem shows no signs of going away.

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As of May 27, there were 1,149 registrations. That’s 411 fewer than a year ago, when the number was already low. Inventory months rose a little in May, but were still at a 2.2 month supply, with single family homes at just two months.

This situation, of course, has not escaped the province’s real estate organizations. Indeed, these groups believe that the housing shortage is so severe – especially given the government’s desire to increase our population by more than 200,000 over the next eight years – they have written a report on it.

The thing is fascinating. For example, I learned that in the middle of 2021, demand for housing in Saskatoon exceeded supply by two to one, reaching a ratio of three to one last March.

The situation is less intense in other parts of Saskatchewan, but still — 4,100 buyers were looking for a home in the province last June, double the 10-year average.

And so the five organizations that wrote the report suggested that we needed more houses quite quickly, and the number is somewhere between 95,500 and 141,500 – the latter figure based on a formula from the Organization of economic co-operation and development (OECD).

When I read the media coverage of the report’s release, however, I was a bit confused. Why do we have this voluminous and well-researched report, but no recommendations on how to fix the situation?

It turns out that I should have read the introduction to the report more carefully. However, being the talkative type, I called Chris Guérette, CEO of the Saskatchewan Realtors® Association, for an explanation.

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The SRA joined with the Saskatoon and Regina Home Builders Associations, the Saskatchewan Landlord Association and Habitat for Humanity (this spectrum is important given the diverse housing needs of our society) to form a committee and produce the report.

Basically, Guérette said, recommendations are coming, likely by the end of 2022.

“We were concerned that the message would be lost,” she explained. “We can’t just wait and launch a massive report to the public (so) we decided to do a two-phase report.

“The next step, now that we know the goal post – and it’s quite a bold and massive goal post – then we can intelligently talk about recommendations. We found that we couldn’t even talk about recommendations until we had correctly identified a goal. »

She noted that the environment and housing are “the two hot topics” for all Canadian elections. The report’s authors wanted to be well-prepared and ahead of the electoral game, because advancing housing construction will require good policy.

“We are trying to crush this (number of houses) in eight years,” she said. “That’s why we’re trying to sound the alarm. If we don’t do it right, we will absolutely become another British Columbia or Ontario. Affordability will no longer be our competitive advantage.

That’s the catch. And yes, the relative affordability of housing in this province is beginning to attract attention — for example, in a recent article in the Toronto Star.

The main problem stems from what the housing industry calls “the missing middle” – single-family homes. They are in high demand and rare across the country (including Saskatoon).

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This leads to price spikes, making these homes gradually out of financial reach for many families. Nationally, says Guérette, “we’re talking about 1.8 million homes that are ‘missing’. ”

This massive national deficit could indeed support the Saskatchewan government’s demographic goal, should more people wish to move to our beautiful province and adopt a less financially stressed lifestyle.

But we would need more houses for this to work.

The housing shortage was a relatively new thing, at least at that time and in Saskatchewan. You may remember the overbuilding of multi-family homes before 2014, when commodity prices crashed.

Now the pandemic (and the low interest rates associated with it), the post-pandemic economic explosion, and a much more poignant understanding of the importance of having your own space, are spurring this surge in interest in housing.

So what can be done? There are challenges to overcome, no doubt. Supply chain issues need to be resolved. Construction costs are increasing. We need more manpower to build these houses (and this is perhaps the biggest sticking point).

We need more immigrants to work and live here to sustain our economy, which will require appropriate government policy to achieve this; and they will also need houses.

Phase 2 of this report will highlight policy issues and suggest fixes and supports.

In the meantime, we and our governments — at all three levels — need to be aware of the complex housing issues we face and start thinking about the future, both short and long term.

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Because housing is both an indicator and a driver of the global economy, and therefore of our collective quality of life.

Joanne Paulson is a freelance writer and journalist from Saskatoon who has covered real estate on and off for over 25 years. Do you have a fascinating real estate story to share? Contact us at [email protected]

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