Last night on CBC’s The National, a panel of learned individuals were discussing the real estate “bubble” in Canada. CBC The bottomline
The general consensus was that we’ll see a 10 – 15% correction in housing prices. That’s a broad brush, as this comment following the story illustrates:
“A 10-15% market correction across Canada? Give me a break. While the oil flows and the minerals come out of the ground in Alberta and Saskatchewan, the prices will go up. Cut down on the blanket statements.”
Will the correction affect all areas of the country equally? Will it affect both condos and single family homes? Is 10 – 15% accurate? Finally, will there even be a correction? Are you holding off from buying because you believe a significant correction is coming?
Very difficult if prices will go down 10-15% evenly, everywhere across Canada. Certain overvalued markets, such as Vancouver or Toronto may go down, but by how much? Their numbers may bring down the overall national average but I believe Alberta should do fine.
Heck, all kinda folks have been fear mongering about a crash. One in particular since January 2008. Still gotta happen.
The Average Wage in Calgary for 2011 is $25.85.
Last Month, April 2012 Average Prices:
Condo $320,912 (plus condo fees)
Here’s a handy link that you can use to compare a 30 mortgage with 4% and 8% rates:
An average house only costs $2300/mth at today’s rate and $3500/mth in the future.
Another link calculates net income:
In Alberta the average worker will take home $3366/mth.
Calculate everything and a couple with average wages will have
$4432/mth at 4% interest
$3232/mth at 8% interest
Even if rates were to ever reach 10%, the monthly payments only go up to $4171, still leaving $2560/mth for living expenses. Houses will only go up in value, along with interest rates.
Buy in now, or be priced out forever. Your children will probably never own a home, unless you buy in now and give it to them in your will. The choice to buy has never made more sense than now.
i watched this also.
I think it’s pretty common sense that it will not be across the board decreases. i agree with most of the stuff they were saying and they did hint that it would mostly be in certain area’s.
The main problem i see with a discussion like this is most of these “experts” are based in Toronto and maybe 1 in vacouver to represent the “west” (which shows the ontario bias thinking BC is anything like alberta economically or philosophically). These panels are a good overview on the general Canadian economy and markets but have little insite on local markets unless you happen to be in ontario, Toronto, or Vancouver.
Well just like prices haven’t taken off here in Alberta like they have in Vancouver and Toronto, I wouldn’t expect any declines to be generalized across the board either.