JOSH BUCHANAN

January 1, 2017

In January of 2016, I wrote post #44 which offered a brief analysis of the market in Regina. As stated in that post, my knowledge, research and interest is very much limited to the city of Saskatoon but I thought it would be interesting to do a quick analysis on Regina to see how things are going there in hopes of offering a new perspective to Saskatoon’s current market conditions.

Sales numbers appear to be fairly consistent throughout the last five years with a soft downward trend. The year actually saw a rise in sales by 76 units which equates to 2.7%. This is obviously much better than the 5.9% decline that Saskatoon saw.

Listings managed to come down significantly in 2016 by almost 500 units from last year. The rise in sales and fall in listings allowed Regina’s sales-to-listings ratio to climb past the 0.50 mark and up to 0.53 which is actually very balanced and slightly into seller’s market territory. While Saskatoon also saw a decline in listings, it also saw a significant drop in sales which resulted in its sales-to-listings ratio coming in at 0.40, the same level as last year which is well into buyer’s market territory.

Average price was very flat in 2016 compared to 2015 as it fell by less than $1,000 which is very appropriate considering 2015 had a sales-to-listings ratio of 0.48 which should lead to very small price reductions. Once again, Regina managed to outperform Saskatoon in this regard as Saskatoon actually saw a $3,647 drop in the average MLS sales price. Going into 2017, the 0.53 ratio that Regina has should mean that prices should stay flat with some slight upward pressure.

Rental vacancies, unlike Saskatoon, appeared to stay flat in 2016 and only rose from 5.4% to 5.5% in one year. Saskatoon saw a rise from 6.5% to 10.3% compared to last year.

Unemployment rates in Regina rose from 3.7% to 5% in 2016 whereas Saskatoon rose from 5.6% to 7.1%. Not only did Saskatoon have a bigger increase in the unemployment rate than Regina, but Saskatoon’s unemployment rate was 2.1% higher to begin with.

Starts, completions and absorptions all saw a reduction in 2016 which is one of the reasons why Regina managed to stay balanced and avoid running into issues with excess inventory or supply and demand imbalances.

Conclusion:

In making an assessment based purely on these statistics (I know this is looking through a narrow lens but it is purely for comparison and curiosity’s sake), it appears that Regina is actually in very good shape relative to Saskatoon and balanced even in absolute terms. Yes, sales numbers have fallen compared to the 5-year average and unemployment rates have risen. However, Regina has done a good job of keeping things balanced and avoided running into the type of market imbalances that Saskatoon is seeing.

Regina seems to have a quick reaction time to market changes and has managed to prevent hyper-supply and allow sales-to-listings ratios to remain within a healthy range. Even though things are slowing down, they have reduced their risk of any kind of market crash moving forward. Too bad Saskatoon doesn’t understand the concept of balance and foresight like Regina apparently does.

For a complete analysis on the Saskatoon market for 2016, please read post #74.

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Data sources:

CMHC Rental Market Report: https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=109&itm=5&sid=uHs3xVdOWIvIOUnMQrWbONaZEn1XLLlomyg2I0ivvUetgea51vCuUYzdtpubGwRg&fr=1452367564193

Government of Saskatchewan Unemployment Report: http://www.stats.gov.sk.ca/lfs/

CMHC Construction Report: https://www03.cmhc-schl.gc.ca/hmiportal/en/#Profile/1490/3/Regina

The views represented are solely those of Josh Buchanan and are independent from any professional organization.