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Old 02-14-2008, 11:11 AM   #201
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Originally Posted by MacDougalbry View Post
I am the last person to defend current price levels. However, this is a factual error in so far as Vancouver is concerned. The median prices for a single family home for all of Calgary is $415000. By compairson, the benchmark price for Maple Ridge (a very far flung suburb of Vancouver) is $457,522.

http://www.realtylink.org/hpi/rebgvh...08&TYPE=buyers

No-no, my point is based on each cities suburban pricing relative to its core area pricing. (Even if Vancouver's suburban pricing itself is slightly higher on average.)

So in Vancouver, a downtown area home is MUCH more then a far suburban home.

But in Calgary, a downtown area home is only slightly more then a far suburban home.


That would indicate more speculative buying/pricing in Calgary with stronger fundamentals (long term limited land supply, real transportation limitations) in Vancouver.




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Old 02-14-2008, 11:44 AM   #202
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If you look at housing prices as a multiple of annual income, Calgary is well below the national average in Australia and New Zealand, below the UK, and there are many cities in the US that have far worse affordability.

http://www.normfisher.ca/pdfreports/dihas2008.pdf

All I'm saying is that big picture it's not like things are so far out of wack that it's going to crash to a halt, at least not on the basis of the cost of housing itself (as shown that there are places that are far less affordable).
Except that housing bubbles exist in all 4 of those nations, with relatively hard landings underway in the UK and the USA with softer landings in Australia and New Zealand. Not sure how all 4 of those countries have bubbles while our price growth is all about fundamentals?

And comparing affordablity in London, SanFran, NYC or Sydney to Calgary is pretty laughable.

Compare us to far more comparable cities (although usually many times larger) like Denver, Dallas, Charlotte, Houstan, etc and you quickly see how over priced our homes are.




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Old 02-14-2008, 11:53 AM   #203
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Vancouver is one of the most beautiful cities in the world. That's why people move there. Toronto is nice, has nice weather and has jobs, that's why people move there.
Cities like that attract more people, it has alway been like that. People in the long past chose these locations because of the water and weather. These big cities will always be attracting people. You may choose Calgary, but you represent the proverbial drop in the bucket.
we can quibble about which city has nicer weather, but I don't think people move to Toronto because of the weather (not saying you would move to Calgary for that reason either).?
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Old 02-14-2008, 12:04 PM   #204
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Originally Posted by Claeren View Post
Except that housing bubbles exist in all 4 of those nations, with relatively hard landings underway in the UK and the USA with softer landings in Australia and New Zealand. Not sure how all 4 of those countries have bubbles while our price growth is all about fundamentals?
I didn't say that, I just said that our affordability is still relatively high on the global stage, meaning that affordability alone isn't the indication of any coming downfall.
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Old 02-14-2008, 12:04 PM   #205
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Well Claeren....if houses in Calgary are over priced....why don't you move somewhere that they're not and start building up your wealth in the mean time? Certainly there has to be some city on this planet left where houses are not over priced isn't there? In time you may be proven right...but that still doesn't mean you played your cards to their maximum potential. Thats why you (and others) come accross and rub many the wrong way. You're sitting back waiting for the market to adjust to what you want it to be and coming up with all these reasons why it will. But in the meantime....what's stopping you from finding a place where you can stop renting, get into home ownership where prices are inline with what they should be and build up additional wealth so if the Calgary market does see the further corrections that you're convinced will happen than you can return? Talk is one thing...taking action is another thing.
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Old 02-14-2008, 12:08 PM   #206
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Originally Posted by photon View Post
I didn't say that, I just said that our affordability is still relatively high on the global stage, meaning that affordability alone isn't the indication of any coming downfall.
Oh, okay.

I am just saying that our affordabilty is not that high when compared to more comparable cities (and/or when our average wages stats are more closely scrutinized).




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Old 02-14-2008, 12:13 PM   #207
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Originally Posted by Claeren View Post
So in Vancouver, a downtown area home is MUCH more then a far suburban home.

But in Calgary, a downtown area home is only slightly more then a far suburban home.
You're missing the point we were making, there are no far suburban homes in Calgary compared with Toronto and Vancouver. you're comparing these places in Toronto and Vancouver that just don't exist in Calgary.

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Originally Posted by Claeren View Post
I am just saying that our affordabilty is not that high when compared to more comparable cities (and/or when our average wages stats are more closely scrutinized).
Well you say Calgary doesn't fair well with comparable cities, which cities exactly are these?
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Old 02-14-2008, 12:19 PM   #208
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Originally Posted by Claeren View Post

Calgary could easily build as many homes around itself as Toronto has (3 Million homes?) and still have those homes closer on average to the core then Toronto. YET Calgary's perifery pricing is much more then Toronto's pricing relative to the core pricing in each city. It just does not add up in the long term.

Claeren.
So you've drawn a few circles around the core of each city and said everyhing in this radius should be X:1 ratio in price compared to the core.
Conceptually anyway.

Interesting idea, but I'm not sure the markets work that way. Even if they did it could be that our core is undervalued, not the other way around.

And land is unlimited everywhere. I'm not sure what makes bald prairie so special that we can build out easier than Vancouver or Toronto. Hell we'd have to build out for a few more decades to get even close to where they are anyway.
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Old 02-14-2008, 12:20 PM   #209
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Well Claeren....if houses in Calgary are over priced....why don't you move somewhere that they're not and start building up your wealth in the mean time? Certainly there has to be some city on this planet left where houses are not over priced isn't there? In time you may be proven right...but that still doesn't mean you played your cards to their maximum potential. Thats why you (and others) come accross and rub many the wrong way. You're sitting back waiting for the market to adjust to what you want it to be and coming up with all these reasons why it will. But in the meantime....what's stopping you from finding a place where you can stop renting, get into home ownership where prices are inline with what they should be and build up additional wealth so if the Calgary market does see the further corrections that you're convinced will happen than you can return? Talk is one thing...taking action is another thing.
haha, i am certainly not waiting for prices to fall (any more than they already have). Not sure where you got that idea? I think prices will just sit relatively flat for 10+ years until inflation catches up and affordabilty is restored. We might see a 5% drop at some point but even that is pushing it, the fundamentals are just too strong in the economy for people to accept a loss on their property.

The suburban market, especially suburban-condo market, is the place most likely to see strong moderation though. I think most of the inner-city (extending a good ways out) will hold or grow in value, as will anything around a LRT station and harder to replace/replicate homes in the far West of the city.

I am working on my post-secondary schooling so that i can make enough that it is no longer an issue. And funny you mention it, but i have been considering a number of more affordable cities to re-locate to. Looking at how much pricing has dropped in a number of very attractive American cities is making the urge to move harder to resist despite many family reasons to stay in Calgary. My current hope is that by the time i am done my masters Canadian pricing has moved to better match deflating bubbles around the world - but that the economy is still strong enough to provide job prospects! Screwed one way if not the other it seems! lol....


But regardless, i am just interested in the real estate theory - i have no particular vested interest.


As for myself buying a place. I did buy 3 years ago but then lost it due to the condo (Union Square/Apex Land) criminally screwing over all of their original purchasers after 2 years of waiting. Back then my $55,000/year income allowed me to buy a very nice $180,000 800sq-ft (+600sq-ft patio) downtown condo. That same unit was 'resold' at $440,000 and unfortunately my government job pay increases, although nice, have not doubled my income. So even if i wanted to buy i couldn't qualify for the mortgage! Hence the going back to school thing....


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Old 02-14-2008, 12:34 PM   #210
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Originally Posted by nik- View Post
Don't be condescending, tourism hasn't been fueling the increase in housing here so you bringing it up is pointless.
Tourism maybe hasn't fueled the recent increases, but tourism does have an effect on demand. I just got back from a trip to Ucluelet & Tofino and after being there for the first time, I am now actively looking for real estate opportunities.
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Old 02-14-2008, 12:35 PM   #211
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Originally Posted by Bend it like Bourgeois View Post
So you've drawn a few circles around the core of each city and said everyhing in this radius should be X:1 ratio in price compared to the core.
Conceptually anyway.

Interesting idea, but I'm not sure the markets work that way. Even if they did it could be that our core is undervalued, not the other way around.

And land is unlimited everywhere. I'm not sure what makes bald prairie so special that we can build out easier than Vancouver or Toronto. Hell we'd have to build out for a few more decades to get even close to where they are anyway.
Yeah, i talk more about it in the Airdrie Real Estate Thread:
http://forum.calgarypuck.com/showthread.php?t=54113


But essentially, the core of the theory it that:

- Downtown area real estate is (1) finite and (2) improvable.

- Far flung suburban property is both (1) infinite (in Calgary's case, not in say, Vancouver's case) and (2) not improvable - thanks to the way those areas are now designed.

- People think the relationship between distance from the core versus housing supply is linear when it is actually far more exponential. Each 1km from the core adds far more homes then the 1km radius added before it.



As for unlimited land in all cities, have you been to Vancouver? Mountains, international borders and body's of water all play a major role. Other cities on the perifery (like Hamilton v. Toronto for example), transportation infrastructure, hard to develop land (like swamps around Toronto) and municiple planning can all have other influences on pricing, but are far more surmountable.

Not 100% perfect but i think the basic theory is sound...



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Old 02-14-2008, 12:48 PM   #212
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Originally Posted by Claeren View Post
haha, i am certainly not waiting for prices to fall (any more than they already have). Not sure where you got that idea? I think prices will just sit relatively flat for 10+ years until inflation catches up and affordabilty is restored. We might see a 5% drop at some point but even that is pushing it, the fundamentals are just too strong in the economy for people to accept a loss on their property.
I can agree that prices in the area likely will stay pretty flat, and that I wouldn't expect housing prices to keep rising with inflation there likely will be a catch up period as you suggest. The principal of people not wanting to sell at a loss so long as they have jobs is also one I agree with. Home owners aren't losing out so much as it is uninformed speculators who are now carrying a second morgage.

Radley does make a point when he brings up the new buying products that were offered in Canada for the first time and how it also coincided with the hot economy, and lower interest rates. It was pretty much the perfect storm to create a real estate spike and it did lead to the crazy growth rate of the last two years. There is a limit as to what people can afford and with the new buying products people didn't waste anytime to run up to that limit. And like anything else...there were people who got to the party a minute late and followed their friend or connections advice to invest and got burned. Isn't the first time people made an uninformed investment and got burned on it either.
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Old 02-14-2008, 12:51 PM   #213
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Originally Posted by Claeren View Post
Yeah, i talk more about it in the Airdrie Real Estate Thread:
http://forum.calgarypuck.com/showthread.php?t=54113


But essentially, the core of the theory it that:

- Downtown area real estate is (1) finite and (2) improvable.

- Far flung suburban property is both (1) infinite (in Calgary's case, not in say, Vancouver's case) and (2) not improvable - thanks to the way those areas are now designed.



As for unlimited land in all cities, have you been to Vancouver? Mountains, international borders and body's of water all play a major role. Other cities on the perifery (like Hamilton v. Toronto for example), transportation infrastructure, hard to develop land (like swamps around Toronto) and municiple planning can all have other influences on pricing, but are far more surmountable.

Not 100% perfect but i think the basic theory is sound...



Claeren.
fair enough. Point 1 I get. Point 2 I think is just not true.

There's an old adage I've heard about real estate. Location location location.

Calgary could build out forever, but 1 hr to the heart of the city is 1 hr to the heart of the city. Land within that space is scarce.

I actually spend a fair bit of time in VAN, MTL, and TOR. In Toronto for example they are building like crazy in areas like Pickering. For about what houses are here in our suburbs. Except it's 2+ hours to downtown compared to 45 mins.
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Old 02-14-2008, 12:54 PM   #214
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Hey has anyone ever considered buying land in Balzac? The last time i looked was 3 years ago and I think 150 acres was $850k back then. I mean the way we build out we will hit Airdrie in no time. Not a big fan of building out though. We have to build up sooner or later. Well i guess later since we are in Canada.
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Old 02-14-2008, 12:54 PM   #215
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The new products offered like longer term mortgages were offered in response to the market, allowing people to purchase homes but keep the monthly payments down in exchange for paying more interest. These aren't new, only new here.
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Old 02-14-2008, 12:59 PM   #216
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Originally Posted by Bend it like Bourgeois View Post
fair enough. Point 1 I get. Point 2 I think is just not true.

There's an old adage I've heard about real estate. Location location location.

Calgary could build out forever, but 1 hr to the heart of the city is 1 hr to the heart of the city. Land within that space is scarce.

I actually spend a fair bit of time in VAN, MTL, and TOR. In Toronto for example they are building like crazy in areas like Pickering. For about what houses are here in our suburbs. Except it's 2+ hours to downtown compared to 45 mins.

I actually grew up in Ajax Ontario and am VERY familiar with the Pickering area! Still have family there in fact!

Problem is that Calgary has FAR more land within 1hr of the core, more forward looking suburb/commuter-oriented LRT infrastructure, more forward planned road infrastructure and fewer competing uses for perifery land - no Oshawa, no Hamilton, etc.

Considering all of those factors, I am not sure how Toronto (Golden Horseshoe) can house ~7M people while growing in absolute numbers at a much faster pace and charge them on average less for their home then Calgary can at 1.1M people even if they are further from the core.


(That is not to say i do not understand the SHORT TERM pressure that created scarcity in the Calgary market that dorve speculative pricing. But long term?!)





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Old 02-14-2008, 01:04 PM   #217
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Hey has anyone ever considered buying land in Balzac? The last time i looked was 3 years ago and I think 150 acres was $850k back then. I mean the way we build out we will hit Airdrie in no time. Not a big fan of building out though. We have to build up sooner or later. Well i guess later since we are in Canada.
Our place is practically in Balzac. We didn't get that kind of a deal though.
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Old 02-14-2008, 01:13 PM   #218
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Problem is that Calgary has FAR more land within 1hr of the core, more forward looking suburb/commuter-oriented LRT infrastructure, more forward planned road infrastructure and fewer competing uses for perifery land - no Oshawa, no Hamilton, etc.
Doesn't that contradict your statement below?
If it's better planned/more convienient etc shouldn't it be worth more?

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Considering all of those factors, I am not sure how Toronto (Golden Horseshoe) can house ~7M people while growing in absolute numbers at a much faster pace and charge them on average less for their home then Calgary can at 1.1M people even if they are further from the core.
I'm not sure the price difference is really there. Or maybe what I mean is I'm not sure the apples to apples comparison is really there.

A place like Ajax should be compared to what, high river? Are we really more expensive here?

In a way I don't disagree. I think the prices in the burbs in CGY are probably proportionately too high. The rising tide floated all boats equally, but they won't all stay there as the tide goes out kinda thing.

I'm just not sure there's some long term systemic difference. And I'm curious. 'Cause i have money tied up in it. So contrary opinions are good.
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Old 02-14-2008, 01:30 PM   #219
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Well Claeren....if houses in Calgary are over priced....why don't you move somewhere that they're not and start building up your wealth in the mean time? Certainly there has to be some city on this planet left where houses are not over priced isn't there? In time you may be proven right...but that still doesn't mean you played your cards to their maximum potential. Thats why you (and others) come accross and rub many the wrong way. You're sitting back waiting for the market to adjust to what you want it to be and coming up with all these reasons why it will. But in the meantime....what's stopping you from finding a place where you can stop renting, get into home ownership where prices are inline with what they should be and build up additional wealth so if the Calgary market does see the further corrections that you're convinced will happen than you can return? Talk is one thing...taking action is another thing.
Well, I am rubbing it in your face too and I bought my first house more than a decade ago. What does that make me?

And again, why are you people getting so offensive? You could be wrong you know?
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Old 02-14-2008, 01:31 PM   #220
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You're missing the point we were making, there are no far suburban homes in Calgary compared with Toronto and Vancouver. you're comparing these places in Toronto and Vancouver that just don't exist in Calgary.



Well you say Calgary doesn't fair well with comparable cities, which cities exactly are these?
Would Airdrie and Okotoks apply?
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