[Claeren]

Another significant problem in Calgary is that the market can now provide 15,000 homes a year (and more if needed). When it could only provide 10,000 new homes and 20,000 people were moving here we had a problem. But when there are more new homes than new people on the new housing side, it makes resales tougher and tougher.

Also the way they calculate average price increases hides a drop in housing prices for at least a year. They take the price you pay at purchase but only count it at possession. So if you bought a house 15v months ago at the height of the boom, THAT is the price they are using TODAY in the average price. That is the ONLY reason prices went up this year - because they are actually last years prices.


On the counter side to all of that, times are far from tough enough in Calgary for people to take a loss on property - from builders not taking a loss on the price they paid per housing lot to individuals taking a loss on their new homes.

So i think you will see a drop in underlying fundamental prices of ~20% BUT that the actual realized prices will simply stay relatively flat for 10+ years until inflation catches up. Suburban condos on the edge of the city will take the biggest hit, with higher-end suburban homes right behind them. Downtown'ish homes will be the most insulated, along with the ring of 1980s'ish homes also holding prices relatively well. Downtown condos will hold well as well i think, but there are a lot of them under construction and far too manh in the same price range for the same demographic of buyers so even there i see some risk, especially if you paid $350k+ for a small 1bd-rm as sadly a lot of people did.

Suburban condos have already dropped in price more than 20% from their peaks and i see another 20% easily. They are easily replaced, poorly constructed and builders HAVE to build them in order to open up density allowence for their single family homes. They hold few actual lifestyle advantages and people still have to maintain the expense of a car or two v. downtown condos. And lastly, Calgary was one of the few markets out there were downtown properties were remotely in the same price level as suburban condos. People talk about downtown Toronto or Vancouver when talking about downtown Calgary prices, but few of them talk about the fact that prices drop off FAR more steeply from downtown to the far perifery in those markets than in Calgary.



But in short, the money has been made in this market for this entire generation. There will be tiny peaks and valleys but nothing like the past 5 years.

The best way to say it, as has ben said, is all downside risk, no upside potential. Regardless of what the actual pricing does....



Claeren.