Statistics Canada released a report of household earnings based on 2012 reported income recently. Depending on your POV, you may or may not be surprised to learn Calgarians reported the highest earnings in the nation. Thought it may be fun to compare 2012 earnings with 2014 average home prices as reported by CREA for a few towns in the Great White North.
| City | Median income | Average price | Price/Income |
| Calgary | $98,300 | $466,994 | 4.75 |
| Edmonton | $96,030 | $371,839 | 3.87 |
| Ottawa | $94,230 | $365,366 | 3.87 |
| St. John's | $87,150 | $349,649 | 4.01 |
| Victoria | $81,580 | $496,225 | 6.08 |
| Canada | $74,540 | $413,215 | 5.54 |
| Vancouver | $71,140 | $796,714 | 11.19 |
| Toronto | $71,210 | $568,953 | 7.99 |
I was surprised by the incomes reported in Victoria. I would have thought they'd be closer to Vancouver. Perhaps not unexpected is the fact that the two most expensive towns to own a home are also below the national average for income. It's not completely clear what the inputs for "average home price" are in CREA's system, but I'd wager they're lumping and smoothing condos, semi-detached and detached.
Useful exercise? Thoughts? I'm sure some of the more number savvy folks around here can improve upon my Grade 3 level analysis in the comments.
404 comments:
«Oldest ‹Older 401 – 404 of 404No there isn't. There are plenty of buyers. The big difference is when the boomers came up there was nothing before them. It's evident that the market was driven up because they were competing against each other yes but the graph shows a big evenly growing population coming up behind them. So unless their is a boomer plague that kills them all at the same time I don't see it having such a big negative effect on the market. I see it having a bigger effect on the stock market and elder care industries. It is a very large amount of grey hairs coming down the pipe. They will demand a lot of services and they will still demand real estate. Perhaps investing in burial plots is the way to go. I hear their prices are on the way up...
Every source I looked up states the birth boom started in 1946. In fact, see the gusher of 65y olds in dasmo's 2011 graph. Jack, you are the first I've heard say it started the same year World War two started (1939).
I don't see any BB die off until the oldest BB (now 68) hits their eighties. Even then widows often remain in their homes into their nineties.
In addition to the millenials, I believe the next best reason household formation will remain strong is our net migration rate. It's by far the highest of the G7.
Canada 5.66
UK 2.56
US 2.45
Russia 1.69
France 1.09
Germany 1.06
Japan 0.00
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2112rank.html
The baby boomer bulge is from 1945 to 1966. If you look at the graph it's obvious. That JD is what your sources are stating. They are talking about the bulge moving through the marketplace.
But if you say when did it "start" then it's just as obvious from the graph that the trough was 1939 and the peak was in the early 1960's. Think of Hitler as your great-granddad and Poland as your great-grandma. Both were being entered in 1939.
What we're trying to pick out of the age distribution is spending and saving habits for real estate. That's more of a function of mental age, health and economics which generally follows chronological age.
You don't have to have a crystal ball to see into the future of what baby boomers will be doing as they age. Just look at what the 70's and 80 year olds are doing today. They don't own multiple properties, one of the spouses is left and their investments outside of their principle dwelling are financial.
Some of you may have a great-grandma and great-grandfather alive that was born before WWII began - what are they doing today?
The Grand-Parents of today are the Baby Boomers. It's more realistic to consider their spending habits than strictly by age. So what do grandparents spend their money on?
If you look at the graph of those that will be be buying their "first" home relative to the number of baby bulge boomers leaving this planet there will be more sellers than first time home buyers in the future at least equal to the "bulge" of baby boomers over the age that is buying. That great epidemic hitting the baby boomers is called death. Old age kills.
As for Canada's immigration it hasn't been enough to offset the bulge. And we certainly aren't seeing those new immigrant coming to Victoria in large enough numbers. Cities like Vancouver and Toronto are being transformed, but Victoria City which has about the same population as Chilliwack isn't attracting that many new immigrants.
Not many of us reading this blog will make it to 90 years old. Half of us might make it to 80 years. We are now an obese nation with more medical problems than any age that came before us. And that isn't going to change in the future. How many obese 80 year olds do you see relative to thin ones. Your great-grandparents didn't live on a diet of Coke and Big Macs and breathed cleaner air in their fifties than you will in your fifties.
The actuary tables for life expectancy is 82 years for a woman and 79 for a man. What that means is out of 100,000 people born. 50,000 or half will make it to 82 years. They aren't saying everyone born will make it to 82 - only half of those born will. About one out of every 10 people reading this blog won't make it to 60.
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