I seem to get asked this question a lot. I did promise to answer this question on this blog so here goes. I don't think many people usually go and buy property outside their home town unless they have some sort of other connection to it apart from investment. (Family lives there, retirement property, used to live there). I generally give everyone a very quick and simple answer using the 3 F's. Namely Food, Fertilizer and Fuel. This generally describes most of Saskatchewan, but it is a quick way to answer this question that gets asked repeatedly.
What do I mean by this for those of you who still don't understand. All three (Food, Fertilizer and Fuel) are necessities for the people of the world. These are things the world will continue to need (and demand) for the foreseeable future and Saskatchewan has them in abundance.
Food: Saskatchewan being a prairie province is a major food producer with many people making their livelihood as farmers.
Fertilizer: It is also the location of a very large chunk of Potash deposits which is a fertilizer... the price of Fertilizer was bid up to like a $1000 a tonne before it came crashing down. Current spot price is about $400 a tonne... but still way higher than what it had dropped to ($150 a tonne)... at the end of the day farmers might be able to go a year or so without fertilizer, but eventually they need to fertilize to keep crop yields up. Potash Corporation was at one time the darling of the stock market and had the highest market cap of any corporation in Canada. They are headquartered in Regina. (Woohoo stable jobs).
Fuel: Saskatchewan also has oil, gas and uranium deposits. Oil from tar sands, but also from oil shales (Estimated to have about 25 billion to 100 billion barrels of oil in the bakken formation alone). Also Saskatchewan is currently the largest uranium producing region in the world. Think of all those new Nuclear power plants coming online in China and elsewhere in the world. While prices for all types of fuel are still on a major uptrend (apart from the hiccup for the great recession)
For those that have a little more time I also explain how Regina currently has one of the lowest vacancy rates in the country. (In the May 2010 issue of Canadian Real Estate Magazine there is a quick write up on Regina in the "Top rental markets" section. 0.6% overall vacancy rate is what is listed there.) Of course that means you don't have much worry renting out your property and with lower vacancy rates also means rising rent (basic supply and demand) which will turn into better and better cashflows through the life of your property.
Meanwhile average house prices are still about $100K below Canadian average. Granted markets like Toronto and Vancouver tend to skew the average upwards, still there are significant deals to be found in Regina. Definitely much easier to cashflow on a cheaper property than a more expensive one.
Net in-migration forecast for between 0.5% to 1.8% in the next five years in Regina. New comers usually rent for awhile first before buying and an increasing population will keep demand high before new housing stock comes into play, putting pressure on rents to rise. Saskatchewan also seems to have a relatively lucky place in the age of their population with a nice little bump in the 15-24 age category that allows them to in a sense replace the baby boomer population a bit compared to the rest of the country. (Less labour shortages)
Other things going for Regina:
- RCMP Headquarters... again a stable workforce and amount of people
- Provincial Legislature. Public Sector again diversifies the workforce with another stable employer. (This contrasts with Saskatoon which is more tied to the resource sectors ups and downs)
- New 2000 Acre Global Transportation Hub that Loblaws and CP Rail will use which will provide construction jobs and permanent jobs as it gets underway
The question should really be... Why not Regina?