Perhaps because Saskatchewan was one of the first provinces to lift social distancing, the local housing market in Regina is showing strong signs of recovery, with the market rebounding 80% since the onset of a decline. According to RBC’s senior economist Robert Hogue, the recovery we are starting to see in Regina is one of the strongest of all the markets that RBC tracks.
Earlier this year, with the outbreak of COVID-19, the housing market in Saskatchewan did experience its share of hardships. Year-over-year sales were down nearly 14% from May of last year; new listings were down almost 20% year-over-year; and the median sale price was down 5.7%. However, despite this negative performance, when one considers that the pandemic has led to a global recession, Saskatchewan’s real estate market is performing quite well and will likely get better as the province continues to re-open. Transactions are beginning to return to normal levels as restrictions are being lifted. According to the Saskatchewan Realtors’ Association (SRA), new listings and sales are up significantly from where they were back in April of this year.
Back in May of this year, CMHC released their 2020 Housing Market Outlook which predicted housing prices would be slashed by up to 18% over the next twelve months. In response to this report, both the Regina & Region Home Builders’ Association (RRHBA) and the Saskatoon & Region Home Builders’ Association (SRHBA) criticized CMHC’s projections for ignoring the sheer resilience of the housing market in Saskatchewan and the localized nature of real estate. While sales prices did experience a slight dip after the implementation of COVID restrictions, this was consistent with evidence from previous pandemics and may be attributed the higher levels of inventory due to reduced sales. Higher inventory combined with weaker demand due to the pandemic placed downward pressure on prices. However, as pent-up demand subsides, and people begin to buy again, prices are expected to return to normal.
We have already begun to see evidence that the outlook for the housing market isn’t nearly as grim as CMHC has made it out to be. This is especially true in Regina where the housing market is showing strong signs of recovery going into summer. According to the Saskatchewan Realtors’ Association CEO Jason Yochim, as the province continues to open up, local housing markets across the province are expected to make a strong recovery. Though we may not be completely out of the woods yet, we should be encouraged by the fact that in Regina, affordability is the best since 2007 at 27.7% and we should expect this to continue to have a positive impact on home sales in the coming months.