Here are numbers of mortgage debt borrowed each year for mortgages, the average weekly wage for each year, the average house price for year. ( 2005 to 2010), I do not have 2005 average weekly wage yet)
From CMHC
NHA and Conventional Residential Mortgage Loans Approved by Lending Institutions, New and Existing,
For Saskatchewan:
*Note this is not growth in mortgage debt. This is the amount of debt borrowed each year for mortgages.
$2,749,000,000 in 2005
$3,191,500,000 in 2006
$4,840,900,000 in 2007
$5,156,000,000 in 2008
$5,759,000,000 in 2009
$6,665,500,000 in 2010
This is an increase of 142%.
Here is the average Saskatchewan weekly wage
$710 in 2006
$749 in 2007
$784 in 2008
$804 in 2009
$846 in 2010
This is an increase of 19%
While the average house price in Saskatchewan has increased:
122k in 2005
132k in 2006
174k in 2007
224k in 2008
233k in 2009
234k in 2010
This is an increase of 92%
The Law of Diminishing Returns is firmly in play as accumulation of mortgage debt each year has continued to increase substantially but house prices have basically stalled.
The next graph shows how house prices have doubled in just a few short years. The value of mortgage loans as a percentage of Provincial GDP have DOUBLED at the same time house prices have DOUBLED!
For the Alberta Realtor: This blog will continue until the bust is firmly in place. But I will admit that Saskatchewan's bust will not be as big as Alberta's. Man, you guys went completely goofy.
This blog provides a lot of really interesting contextual information on Saskatoon RE, and as far as its objective goes, has made its point - we are in a bubble. Where its disappointing is offering a set of solutions and strategies other than renting (which is a nightmare too in Saskatoon if you have ever looked). People move here and need housing, people sell, need a place to stay, etc, and are not often savvy with finances. The thing with this and greaterfool.ca is it promulgates mostly alarm (along with the good advice). Any concrete advice for ordinary folks looking to find a place?
ReplyDeleteThanks for posting a comment. I am always willing to broaden this blog. I have actually started two posts, " ways to save money" and " "Where should you be financially when buying a house". These should be out in the next couple of weeks.
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