The Canadian Mortgage and Housing Corporation (CMHC) has put a red light on overbuilding in Regina.
“On the multi-unit side, there’s no doubt there is a lot of new product out there,” Stu Niebergall, Regina Homebuilders Association CEO & President said.
A red rating means the CMHC sees strong evidence of overbuilding in Regina’s housing market. The city’s overall assessment is also red.
Despite the report, Niebergall believes new home starts in Regina are stabilizing.
READ MORE: Regina experiencing a large rebound in the amount of new homes being built
Starts are up 74 per cent this year. That comes after a slowdown that started in 2014.
When it comes to doing business, Niebergall doesn’t think the report provides enough information to justify Regina’s red ratings.
“It’s not giving enough intuitive information to help the industry figure out what steps it should be taking best,” he said.
The CMHC’s Saskatchewan analyst Goodson Mwale stressed their report is not a forecast, but rather a point-in-time look at imbalances in the market.
“Our framework looks at the inventory of complete and sold units. It also looks at the rental vacancy rate,” Mwale explained.
Their numbers show 17 new and unsold homes per 10,000 people in Regina. The historic norm is closer to 11 homes per 10,000.
- Posters promoting ‘Steal From Loblaws Day’ are circulating. How did we get here?
- Video shows Ontario police sharing Trudeau’s location with protester, investigation launched
- Canadian food banks are on the brink: ‘This is not a sustainable situation’
- Solar eclipse eye damage: More than 160 cases reported in Ontario, Quebec
“In 2015, the apartment vacancy rate went up to 5.4 per cent in Regina. The combination of those two factors is what led to that conclusion,” Mwale said.
Mwale said there is moderate evidence of overevaluation in Regina’s housing market, due to factors including a slowdown in the resource sector.
Not everyone agrees with this mindset. Business analyst Paul Martin said the report jumps to conclusions.
“Based on the information we’ve seen so far, the so-called red light or red alert, I don’t put much stock in that,” he said.
Martin referenced Statistics Canada data that shows the population of Regina is steadily growing. This is why he said we should keep building.
“I wouldn’t be surprised if we ended up with a housing shortage in the not too distant future, and in fact we might then be in the red territory because there wouldn’t be enough supply around and the prices would go up,” Martin elaborated.
Comments