Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 25, 2015 08:15 ET

Rising Inventory and Weaker Fundamentals to Moderate Starts Through 2016

REGINA, SASKATCHEWAN--(Marketwired - May 25, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) Spring 2015 Regina Housing Market Outlook released today, total housing starts in the Regina Census Metropolitan Area (CMA) are forecast to decline to 1,975 units in 2015 before edging lower to 1,945 units in 2016.

"Weaker economic conditions arising from lower oil prices and elevated new home inventory will moderate housing starts in Regina this year and next. Given additional supply in the resale market, local home builders will look to meet new demand through the sale of units that are currently under construction or from inventory, which will result in fewer total starts through 2016," said Goodson Mwale, CMHC's Senior Market Analyst for Saskatchewan.

Following a 43 per cent year-over-year reduction last year, single-detached starts are forecast to edge lower to 625 units in 2015, significantly below the five-year average of 982 units. Elevated new home inventory and an increasing supply of resale homes will be a constraining factor to single-detached starts this year, as will slower employment growth and lower net migration. With economic conditions expected to remain weak next year, a slight reduction to 600 units is projected for 2016.

Multi-family starts, including semi-detached, row, and apartment units, are forecast to decline for a second consecutive year to 1,350 units in 2015 and remain near this level at 1,345 units in 2016. Rising inventory, higher rental vacancies, and moderating demand factors will prompt local builders to initiate fewer multi-family projects over the forecast period.

In the resale market, Regina's MLS® sales are forecast to move lower in 2015, as downside risks posed by lower oil prices impact economic fundamentals and moderate resale demand. A total of 3,500 MLS® transactions are projected for this year, a decrease of 6.2 per cent from 2014. In 2016, sales of existing homes in Regina are forecast to remain relative stable at 3,535 units.

With resale supply expected to remain elevated over the next several months while demand falls, this will further entrench buyer's market conditions in most areas of the Regina CMA. Under these conditions, the average MLS® price in Regina is forecast to decline to $304,000 in 2015 from $314,899 in 2014, before rising modestly to $307,000 in 2016.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, visit http://www.cmhc.ca/ or call 1-800-668-2642. CMHC Market Analysis standard reports are also available free for download at www.cmhc.ca/housingmarketinformation.

Follow CMHC on Twitter @CMHC_ca

Additional data is available upon request

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Contact Information

  • Market Analysis Contact:
    Goodson Mwale, Senior Market Analyst
    (306) 975-4897
    gmwale@cmhc.ca

    Media Contact:
    Dan Toth, Public Affairs Advisor
    (403) 515-2976
    dtoth@cmhc.ca