Regina’s high risk housing market rating blamed on glut of supply

REGINA – The Canadian Mortgage and Housing Corporation is out with a report this week making some homeowners nervous.

According to the CMHC, Regina is at a high risk of a housing correction, partly blamed on overvalued homes and a glut of supply.

“Builders were a little aggressive last year with the housing starts,” said Regina realtor Craig Adam, pointing to the Harbour Landing neighbourhood. “Certainly there were a lot of basements that were poured.”

On Thursday, the Archer family listed their bi-level home in Harbour Landing on ComFree for $429,900. The difficulty is the family is competing with large home builders still selling off oversupply.

“We’re kind of not pricing over what’s being sold right now as a new model. We’re just pricing a bit under it to be a bit competitive,” Matthew Archer said.

Regina has seen a huge price growth over the last decade. In 2004, the average sale price was $111,000, compared to $313,000 last year.

The president of the Regina Home Builders Association said oversupply will work itself out this summer. Housing starts in 2015 are estimated to be half of what they were three years ago.

READ MORE: Number of Regina homes for sale hits 20 year high this summer

“We’re seeing a change in the market,” said Mayor Michael Fougere. “Not the aggressive growth over the last couple of years. Right now we’re seeing a market correction to some degree, but certainly not that we’re at a high risk, no.”

A local custom home builder said the price of older homes continues to be impacted by over supply.

“What’s happened with some of the production product that’s on the market place, it has now been reduced in price,” said Heather McGinnis, with Munro Homes.

“So yes, it will be competing with existing homes until that inventory and that glut of inventory is done.”