Depending on where you hail from originally, housing prices in Alberta can seem astronomical. Although housing prices in eastern Canada are far more reasonable, its all relative. When you live and work in Alberta, you typically make more per hour, or per year, than in places such as eastern Canada. Due to this, housing prices are higher.
It’s a little thing called ‘cost of living,’ and your cost of living, no matter where you live, is generally indicative of the job market. If there are lots of jobs and the jobs typically pay very well then the cost of goods, including housing, usually reflect that (ie. Things are more expensive.) If on the other hand, jobs are hard to come by and the ones that exist don’t pay very well, the cost of goods and housing is usually much lower. If people in western Canada continued to make the money they do, but housing prices were more like that of eastern Canada, the entire country would move to Alberta.
At the same time, if homes in PEI were outrageously expensive, people wouldn’t be able to afford them, and they would likely leave the island. Housing prices always reflect the state of the economy. Although, historically there have been times when housing was unaffordable due to a lack of employment opportunities, this is more of a situation that is the result of an economic crash (and is repaired over time), as opposed to a stagnant and ongoing state.
That being said, one of the most important things a home buyer has to consider is affordability in the long-term. While your mortgage specialist may tell you that you are approved for ‘X’ amount for a home, its important to consider what that breaks down to for a monthly payment, and if you will be able to afford those monthly fees especially once you factor in additional expenses such as utilities and insurance.