Seven months ago, Laura and I sold our house in one of the hottest housing markets in the United States and began looking to buy a house in one of the hottest housing markets in Canada. Real estate weighs heavily in our minds.
Housing prices in Calgary have climbed by a lot, especially in 2006. As people like to do, they often talked around the campfire about how prices were “overblown”, “unsustainable”, “ridiculous” etc. The news sources did a lot of that too.
Today, the Calgary Contrarian (a really good local real estage blog) had a link to this Calgary Hearlad article regarding the “third annual international survey of housing affordability.” The headline and the first 2/3 of the article had few surprises: Calgary is very unaffordable (ie: high housing prices relative to average incomes) and comparable to Toronto, Vancouver/Victoria are still way worse.
That’s not news to anybody. The real interesting part is here:
The survey says that in Canada on average citizens require only 3.2 years of annual income to purchase a home, the best record in the survey. Also surveyed were Australia, Republic of Ireland, New Zealand, United Kingdom and United States.
Of the 159 major urban markets in six countries, 42 are affordable, 36 moderately unaffordable, 22 seriously unaffordable and 59 severely unaffordable. All the affordable markets are in North America with 35 in the United States and seven in Canada
What a lot of people don’t realize is that the increase in real estate prices is a very global phenomenon. It’s not just Calgary that has seen housing prices rise; we’ve been watching Edmonton, Red Deer, and Saskatoon too and they’ve all grown dramatically. Florida wasn’t alone in it’s increase; the whole country jumped and there were plenty of other hotspots. Britain, France, Australia, Russia and many others have had similar increases. Even Costa Rican prices have inflated. It’s everywhere.
The practical effect of this is that it doesn’t matter much where you want to live… you’ll probably be paying more than you would have five years ago. You may be able to pay less by living somewhere else, but everywhere I’ve looked at, the housing prices are quite directly correlated by the desire we have to live there (proof positive: Regina is the “most affordable” city in the study. For those unfamiliar with the city: it’s generally regarded as a craphole).
So, we’ve decided to bite the bullet and pay the high Calgary prices… and be happy about it.
