Quote:
Originally Posted by Bend it like Bourgeois
So you've drawn a few circles around the core of each city and said everyhing in this radius should be X:1 ratio in price compared to the core.
Conceptually anyway.
Interesting idea, but I'm not sure the markets work that way. Even if they did it could be that our core is undervalued, not the other way around.
And land is unlimited everywhere. I'm not sure what makes bald prairie so special that we can build out easier than Vancouver or Toronto. Hell we'd have to build out for a few more decades to get even close to where they are anyway.
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Yeah, i talk more about it in the Airdrie Real Estate Thread:
http://forum.calgarypuck.com/showthread.php?t=54113
But essentially, the core of the theory it that:
- Downtown area real estate is (1) finite and (2) improvable.
- Far flung suburban property is both (1) infinite (in Calgary's case, not in say, Vancouver's case) and (2) not improvable - thanks to the way those areas are now designed.
- People think the relationship between distance from the core versus housing supply is linear when it is actually far more exponential. Each 1km from the core adds far more homes then the 1km radius added before it.
As for unlimited land in all cities, have you been to Vancouver? Mountains, international borders and body's of water all play a major role. Other cities on the perifery (like Hamilton v. Toronto for example), transportation infrastructure, hard to develop land (like swamps around Toronto) and municiple planning can all have other influences on pricing, but are far more surmountable.
Not 100% perfect but i think the basic theory is sound...
Claeren.