Quote:
Originally Posted by Claeren
Not necessarily. Using Japan as an example, unemployment has been extremely low, productivity relatively high, quality of life fairly high, but underlying it all has been an ongoing deflation sucking the upside out of any domestic real estate investment for an entire post-(Japan)baby boomer generation.
A young Japanese person who made the error of buying 20 years ago is still underwater on that investment (as they approach retirement) and will likely never be ahead on it for their entire life. Their compatriot who did not buy is far far ahead...
I see the same thing potentially happening here. Arguably all of these retiring North American workers are going to create a massive jobs vacuum that the rest of us can fill, but will all want to downsize their real estate portfolios creating a huge over supply of homes for us to buy.
How it all interconnects is difficult at the best of times, but I just cannot see how people see upside to buying in this market.
Claeren. |
1. Japan has no immigration
2. San Francisco / America built on faulty banking/lending system
Calgary will not see such a significant drop in prices as those charts portray in Japan and San Francisco
A news report released today put Calgary as #1 in average household income in Canada at approx. $90,000 / year. Edmonton followed as the 2nd highest household income per household.
at 4x's a households income, thats $360,000 for an average house, at 5x's a households income, thats an average price of $450,000 which is closer to where Calgary is right now.
If any city in Canada is going to experience significant losses in value, its going to be Vancouver. They dont have the fundamentals to support current housing prices.