Quote:
Originally Posted by 1stLand
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.
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Which is completely predicated upon the long term viability of our energy industry. I think our exports will always have a place in the world but the world as a whole is rapidly moving away from the current paradigm where structural reliance on oil and gas drives prices. Think coal industry in the NE USA, 60 years ago you would have said I was crazy to think that the world would use anything else.
Calgary (Alberta) also has no true shortage of land. Japan, Sanfran and even Vancouver (etc) have some long term issues that put a bottom in their markets completely unlike Calgary. You could double Calgary's population without moving outward at all. The only bottom in Calgary's market is the cost of materials to build new units.
If the Calgary market actually had demand for it, new builders could provide 20,000-30,000 units per year overnight. I am not sure how that is conducive to any upside. This discussion doesn't have to be about market downside -- with rents so far below carrying costs it is better to rent than buy unless there is upside.
Claeren.