If you needed any more evidence that the excess monetary creation of the past decade is finding its way into every nook and cranny of asset markets around the world, look no further than Saskatchewan, a province that is as flat as a pancake and has a hundred times more gophers than people.
There are now bidding wars for houses in Regina.
Rising new home prices will further amplify Reginas already tight resale market, Regina realtor Jeremy Cossette said. Buyers now routinely make offers greater than the listed price, yet still miss out on homes.
I have buyers who have been looking for several months, and made offers $15,000 to $20,000 above asking and are still looking, he said.
In my lifetime, I never thought I'd witness bidding wars for houses in Saskatchewan.
Here is a map of Regina
Outside the city boundaries, this is what it looks like.
There are no natural boundaries around any city in Saskatchewan.
But, sure enough, real estate is on fire in Saskatchewan's capitol.
The average house price in June was $169,729, a 24-per-cent-jump from last year. Archibald said this reflects the multiple offers many sellers receive, driving sale prices upwards.
"Homes routinely get 10 or 15 offers," he said. "So prices are routinely going above listed price because of competing buyers." ...
Archibald attributed June's strong growth to the usual culprits: High demand, strong economic growth and wealthy buyers coming from outside the province. [Emphasis added.] Strong job performance is attracting workers to the city. ...
And despite soaring prices, Regina's residential prices remain less than half the national average, Archibald said, attracting out-of-province interest.
"I had three requests from Alberta buyers just this weekend," said Kelly Wilson, broker owner of Kelly Wilson Realty.
Same thing is going on in Saskatoon.
Saskatoon recorded Canada's largest property jumps in the second quarter: with bungalows costing an average $281,250 -- more than $100,000 over the same period in 2006. Two-storey homes were even more expensive, going from $196,500 to $305,000. Regina bungalows sold for $204,000 over $143,250 a year earlier.
Saskatoon is a wonderful city, by the way.
But then again, I am biased.
Of course, there are fundamental reasons why real estate would be rising in Saskatchewan, as regular readers ["reader?" - ed.] of the Running of the Bulls know.
Saskatchewan is at least partially catching up to the rest of Canada, a country where the real estate market is booming.
The second quarter ended strongly, the report from Royal LePage Real Estate Services said.
The national average house price is expected to increase by 9.5 per cent, passing the $300,000 mark for the first time, to $303,300. ...
"The most profound story in Canadian real estate today is the extraordinary interest that people across our country continue to have in buying and selling homes," added Soper. "The sheer number of homes trading hands this year has far exceeded consensus expectation.
This market continues to show strength as we move into the second half of the year."
Record numbers of house sales in Regina and Saskatoon -- linked to in-migration of Saskatchewanians returning from expensive Alberta living -- is cited as pushing Saskatchewan into "the regional players exhibiting extreme home sales activity and searing house price increases."
Fifteen years ago, municipalities in the province were offering acres of land for $1 - 65 cents US at the time - if the buyer built a house on the property and lived there.
For years, prices for Saskatchewan farmland have been relatively stable — but now the market is catching fire.
Investors from across the country and around the world who've been buying houses and apartments are also snapping up farmland in the province. ...
While there's nothing new about farmers struggling to make a living, what is new is the price they can get for selling their land.
"It just started here last December and then into the spring here it just went crazy," Bettker said.
According to Saskatoon real estate agent Don Fry, the price of farmland has more than doubled in the last year. He gave an example of about 324 hectares of farmland recently selling for $2 million.
"That's substantially different than it was two years ago — $600,000," he said.
Part of the explanation for the recent boom could be a change in the rules. Until a few years ago, only Saskatchewan residents could buy farmland — an attempt by the provincial government to preserve the family farm.
Critics said what it really did was keep prices artificially low. Now, investors from across Canada can buy Saskatchewan farmland.
The rising interest in farm property is happening at the same time the market for other kinds of real estate in Saskatchewan is turning red hot.
On the outskirts of Saskatoon, backhoes and bulldozers are working overtime making room for more houses. ...
Bidding wars for property are the new norm, with the winner paying well above the asking price.
About half of those buyers are people who plan to live in their new homes, Janzen said. [Emphasis added.]
"We're also looking at a significant sector of investors, not only coming from Alberta but also British Columbia and other areas literally worldwide.
Potential buyers from Australia; London, England; and New York have been coming by, [Emphasis added] he said.
A speculative mania, no doubt. And as sure as night follows day, investors will be caught, trapped, and will have their head handed to them on a silver platter.
There is no more cyclical economy in Canada than Saskatchewan. Not only is the economy hostage to global agricultural, and to a lesser extent, mineral and energy commodity prices, but also to weather. Growing up in Saskatchewan in the 1980s, I remember people literally dancing in the street when it rained because the drought was so bad.
I imagine the mania has some ways to go. But it will end badly. As those of us from Saskatchewan know, it always does.
But in the mean time, good for the people of Saskatchewan, a province that has seen more than its fair share of hardship. Its about time they shared in the global prosperity boom.
To the residents of the province, I'd advise them to sell your land to the city slickers from New York, London, Sydney, Calgary and Torronna. You'll be able to buy it back for much less in due time.
Postscript: As the CFL season kicks off this weekend, I'd like to say