Affordability revisited...

I've a friend working in the engineering industry who recently moved from Australia. He's a sharp guy and has quickly found a job in Edmonton. He is making close to $100k. In Australia, he used to own his own 'little' big place-around 2600 sq ft and he could easily afford that as it cost around AUD$280k or so. He made close to $100k there too, so he effectively paid 2.8 times his gross income.
I sometimes ask him why he moved here. I don't really know why anyone would want to move from sunny beaches and warm weather to Alberta. But, life works upon us in mysterious ways and we can do funny things in life.
So right now he is looking to buy a place. What can he get for $280k in Edmonton? There's quite a lot of stuff available here. Ranging from this one bedroom condo in downtown to this townhouse on the south side.
Oil boom, demands, jobs and all that are all fine. But the fundamental question still remains: Is there a scarcity of any raw materials that go in a house? There is almost a limitless supply of land in Alberta, given our tiny population. There's no scarcity of timber either. The only thing in short supply at the moment is construction labour.
What will happen when this shortage eases? Will our long term prices fall more in line with those of Texas? Will Edmonton and Calgary become as (in) expensive as Houston where average prices are around $200k?

I have another friend that works as an IT recruiter. Last week she said that at least two people declined to move to Edmonton citing higher housing costs. And they were living in Toronto. These are people who make decent wages ($40 to $50/hour) and from a long term perspective should be attracted by Alberta.
The average housing price is now inching towards $400k. That would require at least $100k in annual income for a traditional mortgage with good down payment. Will there be any first time buyers around to buy this stuff?

A quick look at Edmonton affordability

The usual suspects have been claiming how a Scotiabank study (pdf) 'proves' the strength of real estate market, especially in Edmonton.
And how it is based on fundamentals.
Without getting into the usual bullish reasons, that we have covered in the past, let us just look at the fundamentals .
Average Edmonton family income: 57, 360
(these are 2003, numbers so we'll inflate these by around 15% for current values)
Current Family income in Edmonton: 65,964
Average Housing Price in Feb 2007: 321, 307

Number of years required to own an average property at average salary: 4.87

And what does the average property look like? While this would be extreme scenario, this is more typical.

Just last year-Feb 2006, the average dwelling sold for $211,536, giving the number of years to own at 3.35.
In 2003, the number would be between 2 and 2.5 (I don't have the average sales numbers for 2003. If someone has it, I can plug those in here)

Affordability has been falling for Edmonton very sharply, especially in the last 2 years. Anyone who is trying to buy in this market knows how it has fundamentally changed from the market just a year ago. Rather than simply saying that things are going a 'little crazy' here, they continue to cite studies and create spin to confuse the masses.
But I wonder why we even bother asking the truth from 'the insiders'.
Would tobacco industry ever say that its products are injurious to health? Or would pharma companies ever say that their drugs can cause problems? Or would a realtor ever say that it is a bad time to buy?