Excellent questions powayseller!
One thing that happened this year is EVERYBODY got a wage increase because the Alberta government decided to give every man, woman and child a $400CND (or about $360US) “prosperity bonus” in order to distribute some of the their enormous oil royalty revenue. While it is unclear whether this program is to continue, it is my view that this windfall got capitalized to some extent into real estate prices.
This aside, the labour market in Calgary is very tight and the vacancy rate is also very low. I think in the face of strong housing demand vs. tight supply, that it is quite incorrect to say that income growth should equal housing price growth. The demand for housing is, in fact, quite elastic. In the face of higher costs, people will use less housing, or even move into their cars, if they have to.
Definitely, I can say that while Calgary has more than it’s share of McMansions, the price growth shown on the chart is not some sort of sudden shift in sales from shacks to McMansions. In fact, percentage price wise, the shacks are holding more than their own.
Calgary is an interesting housing market to study as it has gone through a number of extreme booms and busts over the years, largely linked to the price of energy. Most helpfully, for we students of urban land economics, the Calgary Real Estate Board http://www.creb.com publishes on their web site, district by district sales and price statistics going all the way back to 1988. I have yet to come across another real estate board this enlightening, when it comes to sharing data!
