Amid surging prices, Saskatchewan is expected to set another sales record for existing houses in 2008, the Canada and Mortgage Housing Corporation says.

According to CMHC's latest housing market outlook, released Monday, it's projected 12,250 existing homes will be sold this year, compared to 12,000 last year. Two-thirds of the homes sold will be in Regina and Saskatoon.

CMHC is projecting 5,600 housing starts in Saskatchewan this year.
(CBC)

Meanwhile, housing starts in Saskatchewan are expected to decline to 5,600 from 6,007. The expected seven per cent decline is a comedown from last year's 60 per cent increase, but 5,600 would still put 2008 among the best years of the past quarter century.

Saskatchewan homes up for sale in 2008 can also expect to fetch strong prices, the federal agency said.

"While Alberta's resale market is facing modest price increases, Saskatchewan has taken over as the nation's growth leader," CMHC said in a news release.

Last year, house prices in Saskatchewan went up 32 per cent from the year before. This year, the projected increase is lower — 26 per cent — but still high by historical standards, CMHC said.

Houses that sold for $174,000 in Regina last year are expected to sell for $220,000 in 2008. In Saskatchewan, the resale price of a typical house — $232,755 last year — is expected to increase to $275,000.

Saskatchewan prices will continue to rise in 2009, but both housing starts and the number of resales is expected to decline, CMHC said.

As Saskatchewan prices zoom upwards, housing affordability falls and as a result, migration from other parts of Canada may not be as strong as it was in 2007, the report said.