Calgary Real Estate Price Elasticity of Supply June 16, 2008Posted by DustinRJay in Calgary real estate, supply and demand.
Tags: Calgary real estate, supply and demand
The supply of residential construction in Calgary has been tightly correlated with house prices over the past 30+ years. High house prices lead to high levels of residential construction as increased margins encourage more market participants.
The following graph compares the amount of units under construction to house prices:
I believe this graph demonstrates that the Calgary real estate market is capable of oversupplying the market at the current price point and will continue to do so until developers margins are thinner. Feel free to post your own interpretation below.