How Is Overbuilding Affecting Homes For Sale In Regina?

Overbuilding in Regina has been a problem for a few years, a problem the residents of Regina have been aware of since 2014. The city has built more units than we have the population to buy. The ripple effects of the overbuilding have certainly affected the current homes for sale in Regina. 


An abundance of multi-family units seems to be the culprit…multi-family units are: townhouses, duplexes and apartment style condos.

CMHC released its quarterly Housing Market Assessment, here is what it said: “…strong evidence of overbuilding was detected in Q1 2017. While down from its peak at the end of 2015, the overall inventory of completed and unsold units per 10,000 population was still above the framework’s critical threshold… Combined with an apartment rental vacancy rate that was also above its critical threshold, this has resulted in the framework’s continued assessment of strong evidence of overbuilding in Regina.”

According to CMHC, Due To Overbuilding, “Downward pressure on house prices will occur until the excess supply is eventually absorbed.”

Resale condos are taking an especially hard hit. Some of them seeing declines in market value up to 20%. Many homeowners are finding that the home they bought in 2012,2013 & 2014 haven’t increased in value and they are at a loss or just breaking even when selling.

It’s also surprising to know that none of the Regina Home Builders have gone out of business yet and there are still hundreds of new homes to built still. Westerra, The Towns, and Edgewater are only ¼ completed.

I anticipate that Regina’s market, as of May 2018 will decline further before it starts to crawl upwards again. On the plus side, there is no shortage of homes for sale in Regina to view when looking for a new home!


UPDATE: As of November 2018, housing prices have continued to drop. Homes for sale in Regina have experienced the lowest amount of sales in over a decade and record low prices, however, it seems the culprit for the added pressure is the new "stress test" rules. It took a while for the changes to have a massive impact on our marketplace but we're finally able to see the implications. The new stress test rules have made it more difficult for home buyers to qualify for a mortgage because they have to qualify at a rate 2 full points higher than the rate they will actually receive. 

Truthfully, marketplaces all over Canada are experiencing severe implications as a result of the stress test's and there are many movements and call to actions that are asking the Canadian Government to rethink their decisions. I hope that the government makes some changes and that we are able to see an increase in prices and sales instead of more of a decrease. Homes for sale in Regina have a number of challenges in today's market. 

 

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If you would like to know how your home’s value is holding up in this over built market feel free to give me a call at 306-552-7047 or fill out my online contact form

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