Regina,
Saskatchewan is a thriving capital city that more than 210,000 Canadians call
home. When a homeowner is deciding whether to buy or sell in Regina, many
market indicators affect their decision to buy says KANETIX.
One
factor that affects housing demand in Regina relates to the city’s current
population and projected growth in the near future. In Regina, more than 47 per
cent of both married and common law couples had children living with them (a
number that is marginally higher than the national average). In addition, the
city’s population as a whole increased by almost seven per cent from 2006
through 2011, which is slightly below the national average for population
growth but still a positive trend.
Throughout
2012 and through the beginning of 2013, Regina has enjoyed a strong economic
boost. One of the most significant factors related to housing demand relates to
rising wages in the area. As the average income increases for consumers, there
is generally an increase in demand for housing. This demand may be from renters
becoming first-time home buyers, as well as from existing home owners making
the decision to upgrade to a larger home.
Existing
home sales for most the last half of 2012 and the first half of 2013 have been
lower than in previous years. While demand for housing has generally increased
during this period of time due to low mortgage rates, positive net migration,
and rising wages in the area, new construction of homes has been significant
during this time period. While the trend in the resale of existing homes has
been decreasing, this is anticipated to turn around as new construction of
homes in Regina slows down within the next year.
The
demand for newly constructed homes was elevated in 2012, but this demand is
expected to decrease through 2013; in fact, it is estimated that new
construction of single family residential homes in Regina will be 22 per cent
lower in 2013 than in 2012. This trend seems to be a result of the shift to an
increasing supply in the resale market, as well as the existing inventory of
newly constructed homes remaining on the market throughout 2013.
While the rate
of new housing starts for 2013 will be lower than in 2012, it is important to
note that the level of housing production in the area is still expected to grow
at a much higher rate compared to the levels in previous decades.
In
2012, resale housing prices in Regina increased by an astounding 8.5 per cent.
This increasing trend in housing prices is expected to continue to increase for
2013, though at a slightly slower pace. For 2013, housing prices are
anticipated to increase by about 3.6 per cent from the previous year, while in
2014, housing prices are projected to increase by approximately 2.4 per cent from
2013. (The average resale price of a home in Regina is roughly $312,000 for
2013; this price is expected to be $320,000 in 2014).
While
some of the increase in housing prices is related to rising demand, it is
important to note that some of the newly constructed homes built over the last
few years are higher-end homes. Some of these homes that are being sold quickly
are increasing the average resale home price in the area.
According
to Canada Mortgage and Housing Corporation, mortgage rates in Regina are still
relatively low—which may be one reason for an increase in the purchasing of
higher-priced homes. Short-term mortgage rates and variable mortgage rates are
expected to remain much lower than average. Writers of the CMHC survey believe
this may “cushion the blow for rising home prices in the area.”
There
are many factors that will drive real estate supply and demand, and because of
this, it can be challenging to accurately predict what the market in Regina may
do in the next year or two. However, given Regina’s relatively low mortgage
rates and growing annual income per resident, real estate market conditions are
expected to remain positive. It is important to note that factors like rising
interest rates and rising home prices may make now an ideal time to buy a home.
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