Taken from the Canada Mortgage and Housing Corporation Website
HIGHLIGHTS:
• Strong population growth and robust labour market conditions set up Regina for housing growth. We expect sales activity and price growth to pick up over the forecast horizon.
• Relative affordability in Regina is increasing competition for housing, diminishing already tight inventories.
• New housing construction is increasingly dominated by rental construction, and we expect to see a shift toward more multi-unit developments.
• Tight rental market conditions will persist as supply is not likely to keep up with rising demand pressures in the near-term. We expect vacancy rates to decline further and average rent growth to remain high above its historical average.
Strong demographic and labour market conditions set up Regina for stronger price growth through 2026
Following a drop in both sales (-4.7%) and prices (-3.6%) in 2023, we expect a rebound in sales and price growth in Regina over the forecast horizon. Sales activity so far in 2024 exceeds record highs for this time of year.
Several factors contribute to the positive outlook for sales activity:
• Rising international migration that is driving strong population growth.
• Combined with a relatively young existing population, the 18-to-24 and 25-to-44 age cohorts are currently the largest net contributors to population growth.
• Rising employment (6,400 jobs created in 2023, a record for Regina).
International migration is a key driver of population growth in Regina, and a large share of immigrants fall into younger age groups. As the younger population grows, we expect more first-time homebuyers to enter the market. Increasing availability of full-time employment opportunities and high job vacancies will also lead to income increases. Together, these factors suggest that demand for housing will rise over the next several years.
While interest rates remain high, we expect sales activity to pick up as home prices are relatively affordable in Regina, especially for existing condominium apartments. Borrowers are less limited by prolonged high interest rates compared to those in less affordable markets, in part due to relatively flat pricing in Regina over the past decade. Relatively affordable pricing on the ownership side will likely contribute to more households being able to move from the rental market into homeownership over the forecast horizon.
High sales activity is expected to further decrease already low inventories of existing homes for sale, increasing competition among potential buyers and putting upward pressure on average home prices. Inventories have been declining at a faster pace in recent months, with the number of active listings well below its long-term average. The share of new housing construction intended for ownership has also declined in recent years, contributing to reduced housing availability. Considering strong demand fundamentals and accelerating rent growth, we expect at least moderate price growth over the forecast horizon.
Strong demand fundamentals will support elevated construction, especially of multi-family housing units
Tight market conditions in both the rental and resale side will encourage stronger construction activity over the forecast horizon. Total starts increased in 2023, led by a rise in multi-unit housing starts. The increase in multi-unit developments was partially offset by a decline in singledetached housing starts. Leading into 2026, we expect to see an increase in both single-detached and multi-unit housing starts.
The rental segment is increasingly dominating new housing construction in Regina (figure 1), and we expect the share of multi-unit developments to continue to rise. High construction and operating costs have impacted development in recent years, but higher rents may help maintain the profitability of rental development opportunities. As competition for rental units intensifies, we expect the new units added to the rental stock to be absorbed at a faster pace.
The City of Regina’s housing incentive programs have supported the shift toward multi-unit developments. Changes to zoning bylaws to encourage high-density development within the city will likely have a positive impact on supply in the longer term, but significant impacts on housing availability are unlikely to show within the forecast horizon.
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