The Best Place to Work, Buy & Sell Real Estate

Saskatchewan's housing market maintained its strength in October, posting the second-highest sales numbers ever recorded for the month. With 1,433 homes sold, sales were slightly down—by almost six percent—compared to last year’s record-breaking figures. However, these results still far exceed historical norms, marking the 28th consecutive month of above-average sales activity that began in mid-2023. This ongoing momentum reflects strong, sustained demand in the province’s real estate market, despite the slight dip in sales.

The number of new listings also saw a notable uptick in October, with 1,922 homes coming onto the market, an 11 percent increase compared to the same month in 2024. Despite this rise in listings, available inventory remained well below long-term averages, largely due to continued high sales volume. The result is a market where supply is still significantly constrained—nearly 50 percent lower than the 10-year average—posing an ongoing challenge for buyers trying to find available homes in the province.

Even amidst global economic uncertainty and broader market shifts, Saskatchewan's housing sector continues to show remarkable resilience. The benchmark price for residential properties in the province stood at $362,700 in October, down slightly from September but still nearly six percent higher than the same time last year. This sustained price growth, alongside continued strong sales in major urban centers like Saskatoon and Regina, suggests a high level of confidence in Saskatchewan’s real estate market. As the year progresses, the outlook remains positive, with expectations for sales to remain above historical averages well into November.

The Bank of Canada has recently reduced its key interest rate, a move that continues the pattern of rate cuts that began earlier in 2024. This decision directly affects borrowing costs across various sectors of the economy, from consumers to businesses. Interest rates, in simple terms, are the costs of borrowing money. They play a significant role in shaping both individual financial decisions and broader economic conditions. When interest rates are high, borrowing becomes more expensive, which typically discourages spending. Conversely, lower rates make borrowing cheaper, often encouraging both consumers and businesses to spend more, stimulating economic activity.

For homeowners, particularly those with variable-rate mortgages, interest rate cuts can provide immediate financial relief. As the Bank of Canada lowers its key rate, banks adjust their prime rates, leading to reduced monthly mortgage payments for those with variable rates. This change can also have a ripple effect in the housing market. Potential homebuyers may be more inclined to make a purchase when borrowing becomes more affordable. Furthermore, the lower rates might prompt lenders to offer more attractive fixed mortgage rates, making homeownership more accessible. As a result, reduced interest rates often contribute to an uptick in housing sales, which can help fuel broader economic growth.

Small businesses are also affected by changes in interest rates, though the impact is more nuanced. On the one hand, lower borrowing costs can ease the financial burden on small businesses, especially those that carry variable-rate loans for things like property or equipment. This relief might allow business owners to invest in expansion, hire more staff, or purchase new assets. However, the broader economic landscape, marked by trade uncertainties and rising operational costs, may temper the positive effects of rate cuts. Many small business owners remain cautious, uncertain about the future due to factors like labor shortages and rising insurance premiums. Consequently, while lower interest rates may help reduce some immediate costs, they don’t necessarily translate into an optimistic outlook for businesses dealing with other pressures.

For individual consumers, lower interest rates often mean cheaper loans, including car loans and credit lines. The reduction in borrowing costs can free up disposable income, allowing consumers to spend on goods and services, which further stimulates the economy. However, not all financial activities benefit from rate cuts. Savers, for instance, may see their returns on savings accounts and fixed-term investments like Guaranteed Investment Certificates (GICs) decline. This can be frustrating for those relying on interest income. On the other hand, individuals with investments in the stock market, particularly in bonds, might see their portfolios benefit as bond prices typically rise when interest rates fall. The net impact on personal finances depends largely on one's asset mix and financial priorities.

While the immediate effects of interest rate changes are visible, it takes time for the full economic consequences to play out. Economists suggest that it can take about a year and a half for rate cuts to work their way through the economy. As banks adjust their lending rates, these changes influence consumer behavior and business decision-making. The Bank of Canada's interest rate decisions are often seen as a signal of the central bank's outlook on the economy, and they can shape public confidence. This in turn can affect how Canadians approach spending, saving, and investing, with ripples that extend far beyond the financial sector. Through these mechanisms, the Bank of Canada exercises a form of "soft power" in guiding economic expectations and behavior across the country.