Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

October 30, 2014 08:15 ET

Rising Inventory to Constrain Housing Starts in Regina Through 2016

REGINA, SASKATCHEWAN--(Marketwired - Oct. 30, 2014) - According to Canada Mortgage and Housing Corporation's (CMHC) Fall 2014 Regina Housing Market Outlook released today, total housing starts in the Regina Census Metropolitan Area (CMA) are on pace to moderate to 2,350 units in 2014, down 25 per cent from the 3,122 units initiated in 2013. Further reductions to 2,150 and 2,100 starts are projected for 2015 and 2016, respectively.

"Rising new home inventory and increasing competition from Regina's resale market have prompted a slower pace of housing starts this year, as have moderating employment growth and lower net migration. Moving forward, these factors will reduce housing starts further over the next two years," said Goodson Mwale, CMHC's Senior Market Analyst for Saskatchewan.

With weaker construction over the summer months, single-detached starts in Regina are on pace to moderate to 750 units in 2014, down 40 per cent from the 1,246 units initiated in 2013. Elevated inventory of complete and unabsorbed units and increasing supply in the resale market have resulted in the reduction in single-detached starts this year. With slower job growth and net migration compared to previous years, this trend will continue in 2015, leading to a further reduction to 725 starts. Barring any significant inventory drawdown, single-detached starts will moderate to 700 units in 2016.

Given the current pace of production, Regina's multi-family starts, which consist of semi-detached units, rows, and apartments, are projected to reach 1,600 units in 2014, down 15 per cent from 1,876 in 2013. "Rising inventory, a slower employment expansion, and lower net migration are contributing to fewer multi-family starts in Regina this year," added Mwale. Moving forward, elevated inventory will prompt a slower pace of initiating new projects. As a result, multi-family starts are forecast to moderate to 1,425 units in 2015, before declining further to 1,400 units in 2016.

Sales of existing homes in Regina are on pace to reach 3,700 MLS® transactions in 2014, virtually unchanged from 3,692 in 2013. This year's moderation in job creation, along with increasing competition from the new home market, has prevented a stronger gain in resale activity across the Regina CMA. With a relatively more rapid employment expansion forecast for the next two years, MLS® sales are projected to edge higher to 3,730 units in 2015 and 3,750 in 2016.

With market conditions recently shifting in favour of the home buyer, the average MLS® price in Regina is forecast to only rise 1.5 per cent to $317,000 in 2014. Additionally, sales composition, unlike in previous years, has had minimal influence on Regina's average resale price this year. Moving forward, rising carrying costs, slightly higher mortgage rates, and weaker equity gains will further inhibit the shift towards higher priced homes. Along with elevated supply, these factors will moderate resale price growth, with the average MLS® price forecast to reach $322,500 in 2015 and $326,500 in 2016.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

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:
    Charles Daniel Mainville
    Senior Communications Consultant
    (403) 515-2915
    cdmainvi@cmhc.ca