New Housing Starts – 723 new home building permits were issued by the City of Regina in 2020, an increase of 264 units (57.5%) over 2019. The construction value of 2020’s new home permits was over $110 million (note this is construction value and does not include the value of the lot) and created approximately 1,500 direct and indirect jobs.
This was a welcome result as early in the pandemic housing pundits anticipated a Canadian housing market meltdown. Example, last spring CMHC predicted an 18% reduction or more in housing prices in Regina in 2020, suggesting home sales would collapse.
Stu Niebergall, President & CEO of the Regina & Region Home Builders’ Association stated, “While the pandemic has created a period of significant economic uncertainty, individuals and families experienced that the “home” has never been more important. The housing market has demonstrated remarkable resiliency and has defied those early and dire predictions.”
At the start of the pandemic the RRHBA had forecasted housing starts in 2020 at 775. We recognized previous public policy decisions locked a percentage of first-time homebuyers out of the market and was constraining potential “up-market” home purchases. A level of built-up demand aided the growth in housing starts in 2020.
Niebergall went on to say “Our provincial governments demonstrated strong support for our industry with the introduction of the PST rebate for new home construction and our industry was considered an ‘allowable service’ ensuring we can continue to build. The federal governments pandemic stimulus and the Bank of Canada maintaining a low interest rate environment also provided stability over the short and medium-term. The City of Regina right sizing of some development charges is a positive step forward to protect affordability in the future.”
As the supply chain for product and materials has created new challenges (lumber prices spiking), we recognize the work of the City of Regina Building Standards in creating safe options for substitutions. We anticipate materials will continue to be a challenge through 2021.
As positive as the growth in the new home market has been in 2020, it must be put into context. The previous year (2019) was the worst year for housing starts since 1996. The 723 new housing starts in 2020 are 40% lower than the 5-year average and 60% lower than the 10-year average.
Housing Start by Building Form
Over $30 million in renovation value, making up 1,527 projects were permitted by the City of Regina in 2020. This is down 16.5% ($5.99 million) and 154 projects from 2019. The most popular projects were:
Renovation activity has generated significant economic benefit and supported jobs in our community. We are very pleased the Provincial Government introduced the Saskatchewan Home Renovation Tax Credit that allows homeowners to claim a 10.5% tax credit up to $20,000 of eligible renovation expenses, including the cost of labour and professional services. Add to this, the recent federal announcement to commit $2.6 billion to an energy-efficiency home retrofit program leading to 2021 being a potentially strong year in the renovation and remodeling sector.
Niebergall concluded, “While the pandemic has decimated many sectors of the economy, the new home and renovation industry has benefited from individuals and families finding creative ways to make pandemic living easier. In return, the residential construction industry has been an important partner in our City’s, Province and Nations economic recovery.”
For more information, contact Stu Niebergall at 306-546-5221 or firstname.lastname@example.org