Saskatchewan has projected a $34.4 million budget surplus for this year, and real estate players are optimistic the black ink will trickle down to the office, industrial and retail sectors. It will also mean more construction work on public projects. The budget for highways and roads, for example, is more than $700 million for this year.
“In a business-friendly climate like this, investment has the opportunity to flourish,” Kelly Macsymic, a Saskatoon-based sales associate at ICR Commercial Real Estate, wrote in a blog post for saskedge.ca.
“That provides for new and expanding business in our communities, which translates to a healthy commercial real estate market,” she noted.
It also means local tradespeople and builders will be in high demand. It’s all a welcome development after several years of stagnating growth caused by struggling commodity markets.
Speculative industrial building slowed down last year to allow for absorption of existing space. Office vacancy remains high, but that was expected with the shuffle of tenants into new or renovated space, Macsymic said.
Provincial government spending plans of about $2.7 billion will also have a positive impact on real estate through the building of new schools in Regina, Moose Jaw and Saskatoon and new hospitals in Weyburn and Prince Albert. It also helps that Saskatchewan boasts some of the lowest personal and business tax rates in the entire country.
“All in all, the budget did not include anything flashy, which is maybe what it needed to be. Despite slower growth, the upside is there for slow sustained growth,” Macsymic said.