Housing, like any other commodity is driven by supply and demand - just look at oil prices when the cap on production was lifted!
With the housing bubbles in Vancouver and Toronto going crazy where will the next bubble emerge?
Remember, there has to be high demand and low supply.
One of the factors that kept the greater Calgary area real estate prices relatively stable over the last few years was that, although demand went down and supply went up, it waas not as dramatic as some people had feared at the beginning. Despite the economic downturn here and the job losses, the real estate market remained fairly resilient. So much so that now that confidence is starting to come back some parts of the market are shifting into a sellers market.
There are some similarities to the early 2000's. At that time house prices were going crazy in both Toronto and Vancouver and there was definitely a miss match between average prices there and many other parts of Canada. In particular, both centres had seen significant increase in immigrants moving to those cities (part of the reason for the increased demand for housing in those cities). There was a time lag of several years, but, as the econmies in the western prairie provinces grew stronger, so did the need for skilled workers. More jobs led to more people moving here, which inturn increased demand for housing.
So the picture right now is that here, in the greater Calgary region, we are on the brink of a recovery, with relatively low supply of inventory in some aspects of our housing. The only missing ingredient for a bubble here is more people coming to lve here. As things get more expensive in the big cities of Toronto and Vancouver and the job market starts to improve here I predict that in the next few years we will see an up swing in millenials moving to Calgary (and other western prairie towns and cities) for a life that they cannot achieve Toronto & Vancouver.
Have your say.......what do you think?