There are no half-million dollar houses in Calgary
It's a new thing, new to the past dozen years or so, this half-million dollar average price for an average home in Calgary. And the recent drop in the price of oil and gas has meant that as the workers flee the city these prices are being artificially held in place...
Let me take a moment to assure you, there are no half million dollar houses in Calgary.
You are buying into a fiction. How, a mere 12 years ago, a bungalow worth $160, 000, is now suddenly worth $500,000? There was a sudden bout of insanity that swept the markets, a boom in the oil and gas sector, and prices doubled, and then tripled, almost overnight.
Think about it. What you are buying is/are:
- Low interest rates, and predicting that they hold forever...
- Optimistic economic forecasts that predict the price of oil and gas will endlessly rise...("and how has that worked out for you, may I ask?")
- You are buying into a system that has allowed banks and landlords to speculate and gamble on your ability and willingness to overpay for a shelter that should be a basic human right. You are being sold a home, not on the basis of "what it's worth" but on the basis of "What can you afford to pay?", and not paying for it's value, but rather what your willing to pay for month after month, year after year, for the next 25 or 30 years...
- You're buying an imagined job security, a commitment to a job at a certain rate of pay for the next 25 or 30 years...
- You are enabling landlords to treat your "right" to shelter as a commodity, to buy up properties, speculate, create artificial scarcity and so inflate prices.
- You are paying for every realtors dream, where every minute of every day is the perfect, the best time, to buy or sell your house...Prices will only rise or drop, depending on what your considering...
- You are paying for the infrastructure - water, cable, sewage, electric, road, not only of your own far flung suburb, but suburbs even further out, these costs averaged over the city, you're buying a commitment to pay for these things your entire life, for in your life they will surely break and property taxes will increase.
- You're paying for 3 months half-hearted labor from a part time cowboy builder, a 3 month project dragged into a year of absent construction workers and tradesmen.
- You're buying into a billboard advertising a suburb filled with idiots just like you, the dream of success and carefully rationed coffee's and packed lunches
- You're buying the bank out of poorly managed investments, out of inevitable foreclosures and NINJA loans, out of poorly concealed bailouts and fixed interest rates
- You're buying insurance on a property you will soon come to hope burns down, and when the storms come you will watch the sky and pray with anxious eyes that the tornado strikes you, that the hail flattens this cardboard monstrosity into the field, that your own poor judgement will be mediated, alleviated by the wrath of God...you'll be praying for the end of the world so you can recover some slight measure of what you've paid...
How much do you earn? 3 times what you earned 12 years ago? Lucky you, few people are doing so well. What do you make now? $100K per year, less taxes, say $65K, less car payments, car insurance, house insurance, less property taxes, maintenance, a 30 minute daily commute if you're lucky, 15 minutes to groceries, and while you're praying the price of gas rises so you keep your job every nickel more at the pumps is crushing you, that SUV, everyone has one, but it's hardly fuel efficient, and those twice-a-week fills are starting to hit you a bit hard, and your mortgage alone, with property taxes and insurance, that's half your take home pay...
And this is a country with more land per capita than any other country on earth, barring Australia. And our land, (Sorry OZ), you can grow things on it.
When the Oilpatch EI runs out, that's when things will start to get interesting...
Links: http://www.theglobeandmail.com/globe-debate/will-this-circle-be-unbroken-rising-house-prices-sinking-dreams/article25889749/