Home Sales Rebound Across the Country in June
Home sales in Canada rebounded strong in the month of June after housing market activity was frozen due to the pandemic. Across the nation, home sales were up 63%, while prices rose 6.5% year-over-year. In Saskatchewan, home sales surged to near record levels last month.
There is clearly a lot of excitement among buyers right now. Recent Saskatchewan real estate market data shows that while the month of April saw a significant decrease in sales (45 per cent province-wide), May and June each proved to be very strong months in terms of sales activity. MLS Saskatchewan data shows that in June, 375 homes were sold in Regina. This is a 50 per cent increase over June 2019 when 250 sales were made.
To some extent, the surge in sales activity can be attributed to the “pent-up” demand that resulted from poor sales in April and May. While at the same time, sellers retreated from the market at a much more rapid pace than buyers. It is also important to note that new mortgage insurance rules brought in by the Canadian Mortgage and Housing Corporation on July 1, 2020 may have motivated buyers to close deals before June was up. For these reasons, some have begun to question whether the recent surge in sales – driven by delayed purchasers waiting to buy since spring’s lockdown – will carry on into the fall. It is nevertheless encouraging to see that home sales, home prices and housing starts have effectively regained a significant amount of the ground lost during the lockdown.
The housing market must now work to keep up its momentum headed into autumn. The tricky part here – especially in Regina where over the last few years the housing market has seen a lot of activity due to new immigrants and first-time homebuyers – will be to balance slowing immigration levels, low interest rates and short housing supply. The recent surge in demand in the market has been boosted by first-time homebuyers looking for bargains during the downturn. This diminishes the number of new listings on the market (since first-time owners don’t have a home to sell) effectively pushing housing inventory to even lower levels. If there are too many homebuyers and too few listings available, this will drive up prices. In Regina, where inventory is getting sparse, prices may soon be on the rise.
Lack of Inventory in Regina’s Housing Market
Buyers are on the hunt for new homes in Regina, but there aren’t as many options on the market. According to Craig Adam of RE/MAX Crown Real Estate, as COVID restrictions ease, people are getting more comfortable going out to look at homes, but the housing inventory in Regina has not been able to keep up with this surge in demand.
There is a lot of interest from buyers right now because both prices and interest rates are relatively low, but the inventory is just not catching up with the demand. While it is somewhat normal to have low inventory during the spring – with the market playing catch up during the summer months – this year, inventory is especially low as “would be” sellers are realizing they might not get the amount they would like for their homes. A house is only worth what a buyer is willing to pay, and with prices across Regina coming down 10, 20, or in some cases 30 per cent, some people just are not willing to list at this point.
According to Adam, home prices in Regina have gone down over the past few years and the current price tag on a home might be similar to what it was back in 2010. However, if there are too many homebuyers and too few listings available, prices may soon be on the rise.
Housing Prices Expected to Increase in Regina
According to an article in the Western Investor – a newsletter which delivers commercial real estate, franchising and business investment news to investors in B.C., Alberta, Saskatchewan and Manitoba – Regina will see the fastest home price increase this year among Western Canadian cities. Regina is expected to outpace even Vancouver, the most expensive market in the country.
In Regina, the current median price of a standard two-storey home is $402,716 while the median price of a bungalow is $289,307. The median price of a condominium is $194,936. Mike Duggleby, managing partner at Royal LePage Regina Realty has stated that “from entry-level homes to the luxury segment, Regina’s real estate market awakened in June and is very active. We are seeing multiple offers and appropriately priced homes can sell within a week.”
In its national forecast released on July 10, 2020, Royal LePage stated that the median home price in Regina would increase 1 per cent by the end of this year. This compares to a 0.5 per cent increase in Vancouver over the same period.