Year-to-date home sales in Regina drop to 8-year low

With more than 1,700 listings for homes for sale in Regina, now should seem like a great time to buy. But according to the Association of Regina Realtors, new federal rules are making it tougher for new buyers to enter the marketplace and it’s had an impact on sales.

A recent report shows that in August, there were 248 sales recorded in the city, a decrease of 16.8 per cent from 2017 when 298 sales were posted. Additionally, the number of sales in the city are below the five-year average of 289 and the 10-year average of 285. As well, if you look at the year to date, sales are down 5.6 per cent compared to last year.

But it’s not just sales — the price of homes has also dropped between 10 and 15 per cent in the last two years.

“Certainly, sellers have had a tough time in the last few years because prices have softened and it’s certainly harder to sell your house than it would have been five years ago,” realtor Craig Adam said. “That’s certainly had an impact on sellers who maybe have bought two or three years ago and are now trying to sell their house because they’re not going to be able to recoup what they paid for it.”

While the majority of the loss is attributed to slowing demand and an influx of inventory on the market, Gord Archibald, CEO of the Association of Regina Realtors, says it comes down to new mortgage qualification rules.

“Essentially, a buyer would need to qualify at two percentage points higher than what their actual mortgage rate is,” Archibald said. “For sellers, they’re seeing lower prices on their sales. For buyers, it’s making it more difficult to get into the marketplace and the third group affected is everyone owning a home, because there’s been equity loss.”

The federal mortgage stress rules were introduced in the fall of 2016 and a second round followed in January 2018. According to Archibald, these rules have caused many buyers to either look down in price range or leave the market altogether because they cannot qualify for mortgage financing.

“The new rules were created by the regulator for the national banks essentially and targeted at the Toronto and Vancouver markets which are overheated and probably needed some cooling off, but they were applied on a broad basis across the country,” Archibald said.

As for sellers trying to sell their homes, Adam says it all comes down to price.

“Especially when a market is declining, you have to make sure you’re following with the market to give yourself an advantage to make sure that it’s priced properly and will sell.”