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Originally Posted by Pagal4321
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Something has been bugging me about this. He states:
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My experience tells me that Calgary is soon to face a housing affordability crisis, possibly within 24 months. Over the last eight years, we’ve seen this play out. Eight years ago, $285,000 would buy you a 2,000-square-foot single family home with a double-car garage on a 36-foot-wide lot. Today, it will buy you a 1,200-square-foot multi-family unit with a single garage 14 feet wide.
My fear is that in the not too distant future, if things continue as they are, the purchasing power for the average Calgary family will erode to the point where home ownership is no longer an option.
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The bulk of that price increase started in late 2005, and ended in mid 2007 (a time period during which most would agree we had a "developer-friendly" city council).
This chart shows the growth in home prices in Calgary from September 2002 through September 2013...
In September 2005, the average price for a detached house was about $275,000. In August 2007, the price reached its peak (in that run) just over $500,000. Since then, it has fluctuated between $400,000 and $500,000. In September 2013, the price appears slightly higher than it was in August 2007.
So, while it is true to say that a single detached home 8 years ago cost almost half the price of a similar home today, it is also true to say that a single detached home 6 years ago cost roughly the same price as a similar home today.
That massive spike in home prices corresponded with a similar spike in Calgary's population (itself caused by a massive boom in the local economy):
http://www.liveincalgary.com/overvie...ast-population
From 2005 to 2006, the city's population grew 4% and from 2006 to 2007, it grew 3.5%. I believe the city census is conducted each spring (April, I believe), so those population spikes line up with the housing price spikes.
I find his statement, "if things continue as they are, the purchasing power for the average Calgary family will erode to the point where home ownership is no longer an option", to be very misleading. If the next five years are similar to the last five years, the average price for a single family house will not be significantly higher than it is today.
He goes on to say, "Government policy impacts the price of housing. That’s a fact. The price of housing impacts our economy. That’s a fact." So, what policies caused the average price of housing to nearly double in less than 2 years between the fall of 2005 and the fall of 2007? What government policies over the last five years have caused housing prices to stabilize?