Real estate markets across Canada have been on an epic surge over the last year – mostly driven by high demand and low supply, leading to a steady increase in prices. The low interest rates coupled with the need for more space by many Canadian households have pushed many into buying property before it is too late – only strengthening these sellers’ market conditions.
Cliff Stevenson, Chair of the Canadian Real Estate Association (CREA), believes that a consistent increase in supply is the only thing that will help relieve the current housing market pressures: “The real issue is not strength in housing markets but imbalance. That demand has been around for months, but with the shortages in supply we have across so much of Canada, a lot of that demand has been pressuring prices. So, the big rebound in new supply to start the spring market is the relief valve we need the most to get that demand playing out more on the sales side of things and less on the price side. That said, it will take a lot more than one month of record new listings, but it looks like we may finally be rounding the corner on these extremely unbalanced housing market conditions.”
Similar to trends witnessed in local real estate markets across Canada, Saskatchewan is experiencing the same highs (in demand) and lows (in supply). According to the Saskatchewan Realtors Association (SRA), the low supply in available properties combined with the vast number of those looking to buy is driving up prices and overwhelming sellers with offers. In fact, Regina, Saskatchewan is currently experiencing cutthroat bidding wars in neighbourhoods across the city.
Regina Bidding Wars Driven by Low Supply
This past February, Regina saw home sales increase by 55.2% when compared to February 2020, and 39.6% above the 5-year average. The month also saw sales volumes climb from $45.9M to $71.5M from February 2020 to February 2021.
March 2021 was a similar story for the Regina region, with the exception of inventory which saw a much needed boost to supply levels. Chris Gberkorbu, SAR Economic Analyst, takes note that the increase in new listings in March has helped to strengthen the market overall: “Although we continue to see supply shrink as inventory levels keep falling, the increase in new listings across most markets is very promising,” said Gbekorbu. With supply shrinking and demand continuing to outpace supply, new listings are important to keep the market growing.”
The month saw the number of new listings rise 58.1% from 430 to 680 in the Regina region, with the YTD new listings in the city rising by 23.0%, suggesting a turn towards a more balanced market.
An increase in listings, also led to an increase in sales. Compared to the previous year, March 2021 had 70.0% more sales in Regina, which is also 50.2% above the 5-year average. This uptick in sales led to staggering numbers in sales as it increased 76.6% in the city from $65.5M to $115.6M when comparing March 2020 to March 2021. “We’ve never seen a March like this before” said Chris Gbekorbu, Economic Analyst. “In fact, we typically don’t see this level of sales until at least May, and until June of last year, we hadn’t seen this level of sales since May of 2014.”
This outstanding demand for housing and the double-digit uptick in sales volume is proof of bidding wars unfolding across the region. Low supply and high demand mean that buyers are more willing to go above the market value and listing price in order to get their hands on the property they desire.
What is to Come for the Regina Real Estate Market?
While it was speculated that sales in the Regina housing market may decrease in 2021, the current market conditions show no sign of sales slowing down anytime soon. As we head into the summer months, it is expected that demand for property will continue to rise, and it is hoped that supply will follow. If supply continues to increase, in terms of new listings, this will help to soften these flaming hot conditions, helping to balance the market and stabilize property prices in Regina. As 2021 continues, we are still projecting that Regina will maintain a balance in the Saskatchewan real estate market; a hopeful sign for homebuyers who are currently perched on the side-lines.