Regina Housing Market Outlook 2016
HOUSING MARKET OUTLOOK 2016
High demand and low supply continued to characterize Vancouver’s and Toronto’s housing markets throughout 2015 as competition from buyers over the limited inventory of single-family homes pushed prices higher. The average residential sale price increased 17 per cent in Greater Vancouver and 10 per cent in the Greater Toronto Area, to approximately $947,350 and $622,150, respectively. As demand shows no signs of waning, these markets are expected to continue to see price appreciation in 2016, of seven per cent in Greater Vancouver and five per cent in the Greater Toronto Area.
In these competitive markets, sellers want to ensure they maximize the value of their homes, while buyers look for guidance during the fast-paced bidding process. In a recent Leger survey conducted for REMAX, 70 per cent of homeowners agreed REALTORs® provide value when buying or selling a home.
Regions outside of Canada’s highest-priced cities reported a spillover effect from the price increases in Greater Vancouver and the Greater Toronto Area continuing a trend that REMAX reported this spring. There were significant year-over-year price increases in Victoria (13%), Fraser Valley (10%), Hamilton-Burlington (12%) and Barrie (8%).
New Canadians and foreign investors continued to be an important demographic of buyers in Toronto, Vancouver and Montreal. Attracted to Canada’s stable economy and low Canadian dollar, this trend is expected to continue through 2016.
In Alberta, a year after the sudden drop in oil prices, housing markets in Calgary and Edmonton showed slower activity but haven’t experienced significant price adjustments. The average residential sale price in Calgary saw a five per cent decrease, due primarily to a larger proportion of sales at the lower end of the market. In Edmonton, the average price increased by two per cent despite more inventory on the market. An ongoing $5 billion development project in downtown Edmonton has stimulated the local economy and helped to keep employment levels up, mitigating the impact of oil industry layoffs. As buyers in these markets continue to feel uncertain, the average sale price is expected to decrease in 2016, by 3.5 per cent in Edmonton and four per cent in Calgary.
Outside of B.C. and Southern Ontario, high inventory continued to be a significant factor affecting the markets in many cities, including Saskatoon, Regina, Montreal, Quebec City, Halifax and St. John’s. This is primarily due to a period of increased construction. Though new construction slowed down in most of these cities, it will take some time for the market to absorb the product. REMAX 2016 average residential sale price expectation for Canada is an increase of 2.5 per cent as Canadians continue to see home ownership as an important milestone as well as a good investment.
NATIONAL SUMMARY 91% of Canadians say that home ownership is part of the Canadian dream More than two-thirds of Canadians say that 10% or more of the price
Regina Housing Outlooks
Higher than normal inventory characterized the Regina housing market in 2015, due to significant new construction that came on the market over the past two years. The average residential sale price decreased slightly year-over-year, from $329,379 in 2014, to approximately $319,850. High inventory kept Regina in a buyer’s market throughout 2015; however, as construction slows and inventory is absorbed, a more balanced market is anticipated next year. With employment levels up and both migration and immigration to the province expected next year, the outlook for Regina’s housing market is optimistic.Regina’s Housing Outlo
- There may be a pause in the market early next year in advance of the April provincial election.
- The Regina Bypass project, a new $2 billion highway project, is in the early stages of construction and a new water treatment plant is in development, which should boost employment over the next several years.
- The REMAX 2016 average residential sale price expectation for Regina is that prices will remain flat.
First Time Buyers
For several years, Regina had very low vacancy in the rental market, which pushed rental rates up and made purchasing a home comparably affordable. New construction in the rental market has increased vacancy, giving first-time buyers less incentive to purchase. New apartment style condo units that have recently come on the market have given first-time buyers the option to purchase a move-in ready property for $200,000 to $300,000, whereas a single-family home in that range would likely require extensive renovations.
First-time buyers and empty nesters drove demand in the condominium market. Empty nesters and retirees, who may spend part of the year travelling or in a second home, are drawn to the low maintenance and security of apartment-style condos. These buyers tend to choose higher-end condo units, while first-time buyers are drawn to entry-level developments.
The upper-end of the market saw a more significant decline in sales than other segments of the market. The majority of higher-priced homes are located in the east end of Regina and consist of primarily resale properties, appealing to local moveup buyers and new transfers into the city.