Financial Jungle

Jungle Bulletin

Posted by Financial Jungle Guy
April 28, 2007

Economists used to think consumers made rational purchasing decisions. But a new field of research is revealing neural forces that leave classical theorists scratching their heads.
Canadian Imperial Bank of Commerce released a report predicting that Canadian house prices are likely to double over the next two decades.
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Categories: Investing; Canadian Interests; Real Estate; Spending; Stocks; Jungle Bulletins; Behaviour

Reader Comments

Comment Number:: 1
Written by:: Monty Loree
Posted on:: April 28, 2007 at 1:09 pm

Hey FinancialJungle,
House prices doubling seems unreasonable. I live in Regina where housing prices have remained pretty stable over the last 25 years.

Places like Calgary… how could people sustain double the price for a house that they are having trouble affording right now?!!

Comment Number:: 2
Written by:: Financial Jungle Guy
Posted on:: April 29, 2007 at 7:21 am

I kind of agree with the report, because doubling over 20 years is only 3.53% per year compounded.

I live in Vancouver, and the average detached sold in March is over $700k. I’ve read various reports that Vancouverites are now paying 60% of their gross income toward home ownership. The only way houses can keep appreciating at this pace is if everyone gets a 10% pay raise every year.

Comment Number:: 3
Written by:: Monty Loree
Posted on:: April 29, 2007 at 2:30 pm

Well possibly,
That’s alot of inflation. Are wages going to increase at the same rate?

Comment Number:: 4
Written by:: Financial Jungle Guy
Posted on:: April 29, 2007 at 5:11 pm

I think it’s highly unlikely that wages will raise at that rate, that’s why doubling the real estate over 20 years is more reasonable than over 7 years.

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