- Joined
- Aug 22, 2008
- Messages
- 428
Methodology:
A)Average house price, 1997; average house price, 2007
--Averarage annually compounded appreciation rate found using discounting techniques
B)Percentage change in CPI, 1997 - 2007, averaged out by dividing the sum total by the time period.
-Average annual inflation-adjusted appreciation rate found by subtracting A - B.
Some interesting findings! These should suggest which markets are most susceptible to a significant pullback in prices, as those which went up the fastest and the most should usually also come down the fastest and the most in the recession that we`re in. The higher the number, I would suggest, the more risk (today`s market activity also tends to support these findings):
01) Edmonton, AB 8.7%
02) Calgary, AB 7.9%
03) Saskatoon, SK 6.5%
04) Victoria, BC 6.2%
05) Montreal, QC 5.6%
06) Vancouver, BC 5.3%
07) Winnipeg, MB 5.0%
08) Quebec City, QC 4.9%
09) Regina, SK 4.8%
10) Halifax, NS 4.6%
11) Ottawa, ON 4.3%
12) Toronto, ON 3.7%
13) St. John`s, NL 2.8%
14) Saint John, NB 2.7%
In my opinion, in terms of real gains (inflation-adjusted), anytime you`re going above roughly 5%, you`re getting into dangerous territory. Edmonton & Calgary`s numbers look scary, and definitely indicative of a bubble. This lends more proof to my "herd mentality" theory from last week.
A)Average house price, 1997; average house price, 2007
--Averarage annually compounded appreciation rate found using discounting techniques
B)Percentage change in CPI, 1997 - 2007, averaged out by dividing the sum total by the time period.
-Average annual inflation-adjusted appreciation rate found by subtracting A - B.
Some interesting findings! These should suggest which markets are most susceptible to a significant pullback in prices, as those which went up the fastest and the most should usually also come down the fastest and the most in the recession that we`re in. The higher the number, I would suggest, the more risk (today`s market activity also tends to support these findings):
01) Edmonton, AB 8.7%
02) Calgary, AB 7.9%
03) Saskatoon, SK 6.5%
04) Victoria, BC 6.2%
05) Montreal, QC 5.6%
06) Vancouver, BC 5.3%
07) Winnipeg, MB 5.0%
08) Quebec City, QC 4.9%
09) Regina, SK 4.8%
10) Halifax, NS 4.6%
11) Ottawa, ON 4.3%
12) Toronto, ON 3.7%
13) St. John`s, NL 2.8%
14) Saint John, NB 2.7%
In my opinion, in terms of real gains (inflation-adjusted), anytime you`re going above roughly 5%, you`re getting into dangerous territory. Edmonton & Calgary`s numbers look scary, and definitely indicative of a bubble. This lends more proof to my "herd mentality" theory from last week.