By Bruce Johnstone, Leader-Post January 10, 2014 - REGINA - Regina home builders built more homes last year than at anytime in the last 35 years, posting 3,122 total housing starts in 2013, according to Canada Mortgage and Housing Corp. (CHMC)
“Since the Regina and Region Home Builders Association has been keeping records, the 3,122 starts in 2013 has only been exceeded by those in 1977, when there were 3,497 housing starts,” said Stu Niebergall, president and CEO of the RRHBA.
“This has also been one of the rare years that Regina housing starts outpaced Saskatoon,” which had 2,980 starts in 2013, Niebergall added.
Multi-family housing starts totalled 1,876, up four per cent over 1,804 in 2012, while single-family starts were down slightly at 1,246 from 1,289 in 2012. “Single-detached home starts were slightly lower for the year then they were in 2012,” Niebergall said. “However, (single starts) are still 30.6 per cent higher than the five-year average and 37.5 per cent above the 10-year average.”
Niebergall noted that multi-unit housing, which include apartments, condos and rowhouses, made up 60 per cent of the housing starts in the Regina area in 2013, with single-detached housing accounting for the other 40 per cent. Forty years ago, single-detached homes made up 71 per cent of the new housing market, he said.
Goodson Mwale, senior market analyst for CMHC in Saskatchewan, said the increase in multiple-unit starts is being driven partly by more young people entering the workforce. “Employment growth is one of the main drivers of the strong housing demand,” Mwale said. “Amongst the typical renters age group of 15 to 24, there’s quite strong employment growth.”
Another factor in the strong demand for rental housing is the growing immigrant population, he added. “New immigrants tend to want to get a feel for the city before they decide to go into homeownership.’’
He added that the number of rowhouses under construction in Regina almost doubled to 395 in 2013 from 205 in 2012, which speaks to the growing demand for lower-cost ownership housing. “It’s an alternative to the single-detached home that might be too pricey for some people.”
But Mwale said the large inventory of single-detached and multi-family housing units completed or under construction means that builders may start scaling back in 2014. “Total units completed and absorbed were 66 per cent higher than last year (at the end of December),” Mwale said. “So inventory is up quite a bit, while units under construction are up 29 per cent.”
As a result, CMHC is expecting to see the pace of housing construction in Regina “moderate’’ in 2014. “With elevated supply, builders are less motivated to increase the pace of starts going forward. In 2014, we’re expecting to see some reduction (in total starts),” Mwale said.
CMHC says the pace of housing construction slowed last month, but demand continued to be healthy.
The annualized equivalent of 189,672 units were started in December on a seasonally adjusted basis, down from 197,797 in November.
“The trend in housing starts has remained essentially stable since October 2013. Housing demand continues to be healthy in Canada,” said Bruno Duhamel, CMHC’s manager of housing analysis.