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.

Marco light-heartedly writes:

But, guys: do you think you could get me one of these? I’d really like one!

He’s referring to the bugged Canadian coins that made the news last week. Apparently, the story was unsubstantiated, and that kind of weakens the point I was going to make, but I’ll post it anyway.

A while back Canada deported a real Russian Spy. Assuming that the allegations are actually true that he was a spy working for the Russian government/security service, it raises several questions in my mind.

Why on earth would Russia base a spy in Canada? I didn’t see any indication that he was doing corporate espionage (which would be understandable), just the regular geopolitical kind. Canada certainly isn’t diplomatically hostile towards Russia, and the Canadian military isn’t any sort of threat. Political strategy has never been more open; you could probably gain as much insight into the Canadian government through public sources as you could by spying, and do so with much less risk. Access to the United States is mentioned, but it seems to me that if you want to spy on the US, you’d be better off planting someone actually inside the country. Canadians have easier access to the USA than most other foreigners, but there are still lots of restrictions and oversight; getting someone into the USA permanently is probably easier than getting someone across the border frequently. So what the heck was this guy doing here? Are they just hedging their bets?

Lots of questions; I’ll probably never have answers to most of them.

My brother Scott writes about the telephone monopoly in our home province of Saskatchewan:

The crown corporation formulated to give its customers the best service possible clearly wasn’t and now has been thrown into the world of competition.

Monopolies are based on the idea that a few people can manage a market better than multiple competing companies (at least when they’re not outright graft). The problem is that history and theory have shown that this is not the case almost all of the time. Markets are far too complex to be managed (that is, understood) by a few brains. The Wisdom of Crowds talks about this extensively. Distributed Knowledge + Self Interest usually gives better results.

Saskatchewan has been a socialist type of place for a very long time; any industry of significance (agriculture, mining, energy, telecom, insurance, medical, education) is run by a government-controlled entity (crown corporation). Alberta, the neighboring province and my current home, has a more liberal inclination, especially in the past decade or two. Alberta has had much higher prosperity than its prairie sibling for a very long time. I don’t think that you can attribute that exclusively to oil (of which Saskatchewan also has plenty); a lot of it is owed to the entrepreneurial environment that Alberta has, and which (by and large) Saskatchewan doesn’t.