Saskatoon, the largest city in Saskatchewan, has been making waves in recent years as an emerging hub of economic growth and development in Western Canada. Nestled in the heart of the province, the city also known as the “Paris of the Prairies” boasts a unique blend of urban living surrounded by vast farmlands.
Avenue Living’s unique and proven strategy is informed by our deep understanding of the metrics and market dynamics behind every investment decision. In this summary, we look at the city’s economic boom, the factors contributing to its success, the rising need for housing, and why Saskatoon is an attractive choice for residents and investors alike.
Economic Growth and Employment Surge
Saskatoon experienced significant economic growth in 2023, fueled by increased full-time employment in high-paying industries like professional, scientific, and technical services. The city also saw strong wage growth across various sectors and notable regional investments. These factors, alongside a steady rise in population, have led to a robust job market, increased housing demand, and a notable decline in vacancy rates from 3.4% in 2022 to 2% in 2023. (1)
Affordability and Population Expansion
Saskatoon boasts strong affordability relative to other jurisdictions, with rental rates still available within CMHC’s well-defined affordability measures of total rent being less than 30% of a household’s pretax income. (1)
The city has experienced a 24.2% increase in total population growth from 2011 to 2022, which strongly outpaced the national average of 11.1% and the Toronto, Vancouver, and Montreal average of 10.3% over the same period.(3) Population growth over the past five years has been steady at annualized 1.6% and is projected to rise to 1.8% per year over the next three years. This increase has greatly affected the demand for rental apartments, leading to a significant shortage of housing across the province. (4) The Saskatoon CMA is now home to 347,536 individuals.(7)
Infrastructure and Development Boom
Saskatchewan is making substantial investments in infrastructure and development projects. BHP’s $14 billion investment in the Jansen Potash Project is projected to boost Saskatchewan’s real GDP to 1.1% in 2024, more than double the national average.(5) The Jansen project will directly benefit Saskatoon’s economy, which thrives on a diverse base that includes key sectors such as mining (potash and uranium), oil, agriculture, and technology.
Culture, Recreation, and Education
Saskatoon also has a unique blend of urban amenities and natural beauty, making it an enjoyable place to call home. The city has a vibrant arts and culture scene including the Remai Modern, a renowned contemporary art museum known for its works by Canadian and Indigenous artists. The area also features many parks and green spaces like the Meewasin Valley for outdoor enthusiasts to enjoy, and countless festivals and events throughout the year. With its friendly prairie charm and endless entertainment options, Saskatoon truly offers all its residents a high quality of life.
Saskatoon is known for several prominent educational institutions, including the University of Saskatchewan (U of S) and Saskatchewan Polytechnic. The U of S is particularly well-regarded for its research contributions and programs in agriculture, engineering, and health sciences.
Investment Appeal
For investors eyeing the real estate market, Saskatoon presents an attractive opportunity. Multi-family cap rates in B-class properties in Saskatoon ranged from 5.25% to 6.75% in Q4 2023 versus the national average of 4.62% to 4.90% during the same period.(6) Rent growth in Saskatoon was also very robust in 2023, increasing 9.2% from 2022 while boasting an impressive occupancy rate of 98% as of October 2023.(1) Saskatoon’s current primary rental supply of 18,067 units (1) — of which 1,583 are managed by Avenue Living — has failed to keep pace with the city’s growing population, contributing to Saskatchewan’s substantial housing supply gap, now estimated to exceed 6,000 housing units.(4)
Saskatoon’s remarkable economic growth, diverse industries, and attractive real estate market position it as a key player in Canada’s evolving landscape. Saskatoon’s future appears bright and promising as the city continues to draw in residents and investors alike. Whether you’re seeking a thriving job market, affordable living, or lucrative real estate opportunities, Saskatoon is undoubtedly a city on the rise.
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://www.avenuelivingam.com/forward-statements for additional information regarding forward-looking statements and certain risks associated with them.
Sources:
- (1) Rental Market Survey (CMHC) © 2024 Canada Mortgage and Housing Corporation
- (2) Rental Market Survey (CMHC) © 2023 Canada Mortgage and Housing Corporation
- (3) Historical Saskatoon Canadian, Vancouver, Toronto, Montreal population growth (2011-2022): https://www.canadapopulation.net/
- (4) CMHC Housing shortages in Canada: https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/accelerate-supply/housing-shortages-canada-updating-how-much-we-need-by-2030
- (5) Deloitte Economic outlook: Quarterly update on Canadian and international economic trends and events: https://www2.deloitte.com/ca/en/pages/finance/articles/economic-outlook.html
- (6) CBRE Canadian Cap Rates & Investment Insights Q4 2023
- (7) Population estimates, July 1, by census metropolitan area and census agglomeration, 2016 boundaries https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710013501
