In my previous post, I had a poll that asked what the biggest perceived supply risk to the real estate industry in Calgary over the next three year horizon. This was a randomized poll, meaning that the order changed each time. Well, the results are in and an overwhelming majority selected interest rates rising as [...] […]
Much has been said about the growing amount of mortgage arrears in Alberta, but how much does that impact supply? As shown in previous graphs on this blog, the resale market has generally been rising whenever sales\new listings is greater than 50%. Given that Calgary condo and single family home average resale prices has risen [...] […]
As noted in previous posts, Calgary’s affordability has been on an improving trend. RBC economics shows that the current affordability in Calgary is nearing cyclical lows. If one looks at the period, all of the time between 1998 – 2005 I would consider fairly good times to buy. Since 2007, a combination of rising household [...] […]
Studies have shown that there is a tendency among analysts to be consensus seeking. More often that not, analysts are benchmarked against their peers so an analyst may be rewarded even if his prediction is off the mark as long as it is not too far off from consensus. According to some studies, analysts are [...] […]
It’s been awhile since my last post, so I thought I would share some interesting information. The first graph illustrates the historical supply and new listings on a seasonally adjusted basis. Sales and new listings have been adjusted on a seasonally adjusted basis so that it gives a leading edge indicator of of how the [...] […]
The following graphs illustrate the historical relationship between absorption rate and house price changes in Calgary. As the absorption rate decreases, demand exceeds supply, and house prices rise. When the absorption rate is high, supply exceeds demand and house prices fall. While I do not believe this metric is useful for determining long term price [ […]
This report is from TD economics. Below is an excerpt specific to Alberta, with a link to the full report at the end of the post: “Wild Rose country was overbuilt substantially during its boom years, and mounting inventories in Calgary and Edmonton are cause for concern. Indeed, even over 1991 to 2001, housing starts [...] […]
Calgary housing affordability is now better than long term averages. This is due to three reasons: growth in household income falling interest rates and a correction in the housing market. The following chart also illustrates how housing affordability is much better than the early 1980′s real estate cycle and more similar to the early 1990′s [...] […]
There are really three separate, but linked, real estate markets: the resale market, the new construction market and the rental market. The following graph shows the historic relationship (1973-2008) between vacancy rates and rental increases for Calgary and has a good correlation of R²=0.80. [click above for larger view] Source: CMHC Rental Market Statist […]
One way of evaluating assets is to compare them to a safe investment. Arguably, the safest investment in Canada is Government of Canada bonds. The biggest risk with holding a bond, is that it is subject to inflation over the term that you hold the bond, but virtually guarantees return of your capital. The following [...] […]
