Blog #2

Canada Housing starts cool in October, but still cold
Canadian Statistics data showed that the annual inflation rate(6.2 percent from 6.5 percent ) in new housing prices declined for ten consecutive months in September but still is positive. Bank of Canada uses housing price as an indicator of whether the economy is overheating. Figures shows that the decreasing rate of housing price is greater than increase. As according to the data, double digit annual price rises were seen in Calgary(it was only 5.9 percent higher from a year ago; however, in previous years it was 59.4 percent), Edmonton, Winnipeg, Regina and Saskatoon(these 3 provinces are 47% higher than in September). On the other hand, Windsor was the only town where price deflation is still occurring.
see article


Relation to the chapter -demand , elasticity, supply
This article relates to the chapter in a few ways. As we can see from the cooling off of house pricing, this indicates a sign of decrease in demand. "Figures shows that the decreasing rate of housing price is greater than increase..."The actual cause of this decrease was not stated in the article, but some of the causes for this decrease in demand might be the lowering in price of mortgage rates. Since the housing price is so high, people would rather get an apartment first or maybe even rent a house first. It is true that we all need a shelter; however, houses are elastic. Thus, the quantity demanded will be affected when prices continue to rise. The reason is there are substitutes to housing such as renting or buying apartments, and that the percentage of budget of an individual is quite high. I think many people will be wondering if the demand is continuing to decrease, will the price of housing be pushed back down to a more reasonable and affordable price?

Personal Reflection
In my point of view, I think the price of housing is evidently going to continue to decline due to the decline in demand. This is also what i have predicted before when the housing price started to raise dramatically 5 to 6 years ago, because of the massive increase in Chinese and Taiwanese immigrants who are very rich. Moreover, because land is a scarcity. Although prices for housing is starting to be at its cooling stage; however, the price of a house is still very expensive, which many average families are not able to afford (the tax, the mortgage..etc). Thus, is it still worth it to spend that huge amount of money on a house now while the price is still dropping? Personally, if i was desperate for a shelter, i would prefer renting a place first, because i believe that the price will drop dramatically like how it rose dramatically at first. That is the good time to buy a house.