Quote:
Originally Posted by username
I'd break it down like this:
- Intrest rates are going up, therein prices are going to rise (reduces demand)
- Calgary's population growth has been relatively flat (No increase in demand)
- Several condo buildings have resumed construction (increase in supply)
- Housing starts have been increasing due to the low rates (increase in supply)
All these points lead to an increase in supply while we see a decrease in demand. I don't see how prices go up. I admit this is a very simplisitic view of the real estate market but these are the main factors that affect the price.
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Other than the population growth (population is growing at 2.7% yoy in Calgary, which is what, 30,000 people?) those are all relevant. Also you can add in a lot of hidden inventory as people that tried and didn't sell are putting their stuff back on the market which increases supply.. mind you the supply isn't completely crazy like it was in spring 08, but it certainly is trending that way so it'll be interesting to see. Sales fortunately are better now than they were then so the absorption rate while high is much closer to balanced.