Quote:
Originally Posted by GGG
I don't think its fair to compare the same property in the same city.
The city has changed. Buying a house in a 500k city is different than buying a house in a 1 million person city. The distance from the new housing stock greatly affects the price the person is willing to pay. Any comparison should really be done on new construction at the suburban edge of the city if you want apples to apples. As you can't expect a city to grow in size and not have higher property values the closer you are to downtown.
It would be like moving from Saskatoon to Calgary and expecting prices to remain the same.
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This is a good point. So many other factors go into housing costs. You know where houses have remained relatively stable for the last few decades? Houston. Never mind the ring roads upon ring roads of sprawl and impending infrastructure maintenance disaster. (hidden costs)
People lobbied the government for easier home ownership 20 years ago. Next thing you know we ended up with 0% down 40 year mortgages. The market exploded and when everything settled out the same wealthy 2/3rds of Canadians could own.
Meanwhile in the last 30 years the population of Calgary has gone from 600k to 1.3 million. Go 30 years further back to 1956 and the population of Calgary was 180k. My buddy pays $1,300 US/month to rent a 200 sq. ft. studio a 30 minute train ride from Manhattan. You probably couldn't find a studio that small in Somerset but it sure as hell isn't going to cost you near that much. Simple supply and demand.
Your average post war bungalow built in the 50's was 1,000 sq. ft or so. What's an average suburban starter home? 1,800 sq. ft? Comparing apples to apples, starter homes on the edge of the city where the land is practically worthless, a modern home should cost double - it's twice the size.
So government intervention, rapid population growth and huge homes. Is it really a surprise that homes have gotten more expensive? Oh yeah, don't forget the easy access to free money.