Regina housing market to grow quickly: TD
July 15, 2011, Regina Leader Post
The report noted the Regina region had the lowest jobless rate in the country at 4.6 per cent at the end of 2010, while creating 7,000 new jobs at the end of December.
The relatively strong economic performance has helped increase new housing demand, with housing starts up 45 per cent in 2010 over the previous year prior and first-quarter starts up 21 per cent versus this same quarter last year.
Apartment rental vacancy rates — the lowest in the country at less than one per cent — are starting to creep up, which could lead to a slowdown in investor and secondary market action. Still, population inflows and steady wage gains are expected to partially offset any decrease in rental market activity.
The resale market has shown decent gains over the last 12-18 months, with annual resale price gains recorded in both 2009 and 2010, and for the first five months of the year. However, sales tumbled by 3.3 per cent in 2010, slightly less than the national average, and are flat year-to-date.
“We anticipate that the second half of the year should see an increase in activity as homebuyers try to beat out the interest rate hike at the beginning of 2012,” the report said. “Prices are thus expected to hold firm in 2011.”
Both resale housing sales and prices are poised to dip in 2012, but the underlying strong regional economic fundamentals suggest that the correction will be relatively slight and short in nature, the report said.
Price-to-income — how home prices line up with income fundamentals — suggest that even with these monthly fluctuations, the region is in balanced territory. However, if economic growth is stronger than anticipated, the market may see higher sales and average prices.
The Saskatoon economy stumbled in 2010 and so too did employment growth, the report said. “We expect the region to fare better over our forecast (period), but it must first recoup all of the jobs lost in 2010.”
As a result, TD expects only a moderate near-term growth for Saskatoon. In turn, the regional housing market will retreat from a double-digit gain in sales recorded in the first quarter of 2011.
Resale price gains should also inch down from the robust 4.2 per cent posted during this same quarter.