Regina home prices down in 2015, flat in '16, Re/Max says

Regina Leader Post, Dec 11,2015 - Resale home prices dipped slightly in Regina in 2015, largely due to new housing units coming on the market over the past two years, causing listings to rise to above-normal levels, according to Re/Max.

However, as residential construction slows and inventory is absorbed, a more balanced market  is anticipated next year, Re/Max said in its 2016 housing market outlook released Thursday.

The average residential sale price decreased slightly year-over-year to $319,850 in 2015 from $329,379 in 2014,  while prices are expected to remain flat in 2016, the report said.

“For several years, Regina had very low vacancy in the rental market, which pushed rental rates up and made purchasing  a home comparably affordable,” Re/Max said. “New construction in the rental market has increased vacancy, giving first-time buyers less incentive to purchase (homes).”

For example, new apartment-style condo units have given first-time buyers the option to purchase a move-in ready property for $200,000 to $300,000, while a single-family home in that price range would likely require extensive renovations.

Nationally, the resale housing market was driven by high demand and low supply in Vancouver’s and Toronto’s housing markets in 2015, Re/Max said.

The average residential sale price increased 17 per cent in the Greater Vancouver Area and 10 per cent in Greater Toronto Area to $947,350 and $622,150, respectively. Prices are expected to rise by seven per cent in Vancouver and five per cent in Toronto in 2016.

“Based on the projections for Canada’s key housing markets, Re/Max expects the average home price in Canada to increase 2.5 per cent in 2016,” said Gurinder Sandhu, executive vice-president of Re/Max’s Ontario-Atlantic Canada region.

Regions outside of Canada’s highest-priced cities reported a spillover effect from the price increases in Vancouver and Toronto, including Victoria (13 per cent), Fraser Valley (10 per cent), Hamilton-Burlington (12 per cent) and Barrie (eight per cent).

Housing markets in Calgary and Edmonton saw slower sales in 2015, but haven’t experienced significant price declines. The average residential sale price in Calgary saw a five per cent decrease, due primarily to the larger proportion of sales at the lower end of the market.

In Edmonton, the average price increased by two per cent, as a $5-billion development project in downtown helped keep employment levels up, partially offsetting oil industry layoffs.

“With oil price volatility continuing to make buyers feel uncertain, we do expect the average sale price to decrease next year — by 3.5 per cent in Edmonton and four per cent in Calgary,” said Elton Ash, regional executive vice-president of Re/Max of Western Canada.

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.

In Saskatoon, prices fell two per cent to $354,150 in 2015 from $361.031 in 2014 and are expected to remain flat in 2016.

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