Real Estate going to be Cheap in Alberta?

JLM

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Nov 27, 2008
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Just heard on C.B.C. news that people in Alberta are walking away from their mortgages and handing in the keys as unemployment rates rise and people are out of money. How is this phenomenum going to play out?
 

Retired_Can_Soldier

The End of the Dog is Coming!
Mar 19, 2006
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I actually think its being overblown by the media. There are people in Alberta who have put themselves underwater, simply because of bad choices when it comes to spending, but this is nothing like the housing crash in the states.

As a whole, Canadian's are carrying way too much debt.

It should be this governments top priority to do everything they can to get to work on the economy, but they are more interested in photo ops and sound bites. Energy East is only one example of how inept they are. Hopefully, Canadians will turn up the heat on the Rockstar or one of the masters holding his puppet strings.
 

JLM

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Nov 27, 2008
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As a whole, Canadian's are carrying way too much debt.


I couldn't agree more and some of it is due to usurious interest rates by some money lenders. I'd like to see the pay day loan sharks annihilated. They take advantage of our most vulnerable (of course some of the most vulnerable bring it on themselves) but getting rid of them would be a start. Credit card interest should be next to be greatly reduced. The ability of some folks to differentiate "wants" from "needs" could be greatly improved too.
 

taxslave

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Nov 25, 2008
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Probably anyone that just handed the keys back to the bank didn't have any equity to speak of anyway. All they were doing is paying high rent. Same with their toys.
 

B00Mer

Keep Calm and Carry On
Sep 6, 2008
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Rent Free in Your Head
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Just heard on C.B.C. news that people in Alberta are walking away from their mortgages and handing in the keys as unemployment rates rise and people are out of money. How is this phenomenum going to play out?

1980's assumable mortgages offered by the banks..

It's very sad that people are in this situation.. and with oil looking like it won't be on the rise in the foreseeable future, it might not get better any time soon..
 

MHz

Time Out
Mar 16, 2007
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The profits the banks make go to the 'owners' so unless you sit on one of their boards your stock profits go to them and them alone. You would be better off investing in your local politician.

The empty places will be bought up at a fair price if the banks own them and they will become rental units. That would mean top dollar if they are for sponsored people and the 'others' can get the units that are in the worst condition.
 

davesmom

Council Member
Oct 11, 2015
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Just heard on C.B.C. news that people in Alberta are walking away from their mortgages and handing in the keys as unemployment rates rise and people are out of money. How is this phenomenum going to play out?

The same thing has happened in the past when Alberta's economy hit road bumps. How it played out is that people bought up properties at a cheap price and sold it at a profit when the economy started booming again. That is how it will play out this time too. Things will pick up eventually. It is a matter of those who can afford it hanging on and those who cannot losing and going elsewhere to find work.
 

JLM

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Nov 27, 2008
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The same thing has happened in the past when Alberta's economy hit road bumps. How it played out is that people bought up properties at a cheap price and sold it at a profit when the economy started booming again. That is how it will play out this time too. Things will pick up eventually. It is a matter of those who can afford it hanging on and those who cannot losing and going elsewhere to find work.


For sure. :)
 

petros

The Central Scrutinizer
Nov 21, 2008
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The same CBC who had a spotlight on a Calgarian who lost her job after 20 years and now has to sell organic popsicles for $6 a pop?
She never worked in oil but in marketing, she is late 50's and was laid off from her "very comfortable" position.

In otherwords the company she worked for was top heavy and attrition bit her in the ***.
 

bobnoorduyn

Council Member
Nov 26, 2008
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I'd like to say this is the '80's all over again, but it is and it isn't. The '80's had two bad things, high interest rates and the NEP. Interest rates were in the 21.5% range, yeah really. And Trudeau #1 nationalized Oil. Guess what, all investment money left the country, double whammy. Folks left their keys on the counters and left, (the really mad ones trashed their homes beforehand). Alberta was the only province at the time where the banks could not come back at you if your mortgage was worth more than your home. I don't know if that is still the case or not, haven't needed to ask. In other provinces, bankruptcy was the other option, a real pain that follows you.


I don't see a price crash like that again, unless of course government precipitates it again like last time, which is highly unlikely, (I hope). Alberta is due for a correction for sure, but I think it will be fairly benign on the grand scheme of things. The markets will go up again. Where the correction needs to happen is in Toronto and Vancouver, but that's only because I believe they deserve it.
 

tay

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May 20, 2012
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I'd like to say this is the '80's all over again, but it is and it isn't. The '80's had two bad things, high interest rates and the NEP. Interest rates were in the 21.5% range, yeah really. And Trudeau #1 nationalized Oil. Guess what, all investment money left the country, double whammy. Folks left their keys on the counters and left, (the really mad ones trashed their homes beforehand). Alberta was the only province at the time where the banks could not come back at you if your mortgage was worth more than your home. I don't know if that is still the case or not, haven't needed to ask. In other provinces, bankruptcy was the other option, a real pain that follows you.

I don't see a price crash like that again, unless of course government precipitates it again like last time, which is highly unlikely, (I hope). Alberta is due for a correction for sure, but I think it will be fairly benign on the grand scheme of things. The markets will go up again. Where the correction needs to happen is in Toronto and Vancouver, but that's only because I believe they deserve it.


Alberta is still the only Province where the banks aren't allowed to chase you. And I knew of people who walked away in Ontario when the mortgage rates went so high and they had to re-new.....

Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those are loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).

If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnishee your wages.

Jingle mail was an enormous problem in Alberta in the 1980s, when mortgage rates were hovering around 20 per cent and people began leaving the province to find work elsewhere. It made a rough housing market even worse when banks were forced to sell off abandoned homes at a discount.

Jingle mail rears its ugly head in Alberta again - Calgary - CBC News
 

Dixie Cup

Senate Member
Sep 16, 2006
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I couldn't agree more and some of it is due to usurious interest rates by some money lenders. I'd like to see the pay day loan sharks annihilated. They take advantage of our most vulnerable (of course some of the most vulnerable bring it on themselves) but getting rid of them would be a start. Credit card interest should be next to be greatly reduced. The ability of some folks to differentiate "wants" from "needs" could be greatly improved too.



I agree that the money lenders are a blight on our society as once you get involved in them, there's no getting out. I call them legalized loan sharks.

Insofar as credit card interest, the bottom line is it doesn't matter if the interest rate is 9, 19 or 50% - if you pay it off each month, it doesn't affect you! If you can't pay it off, cut the damn thing up and try harder to live within your means.

It amazes me how many people I see each week in my counselling sessions tell me that "their credit was good and they always paid their bills on time" until .....whatever happened. NO - WRONG - If you were making minimum payments, you WERE NOT being responsible and you DID NOT have a good "credit rating". What is it about "over spending" that people don't understand? It amazes me how so many of us are so uneducated about "finances". Throw the bloody credit card away if you can't be disciplined enough to handle it.

JMHO
 

tay

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May 20, 2012
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Yes DC.

Ever since the Bank Of Nova Scotia started their 'You're richer than you think' campaign I have cringed every time I hear that.

People are being encouraged to get in debt based on the temporary equity on their houses. The Banks tell these homeowners that they can afford that new car for 4-5-600 a month because they have made 50,000 equity in just 6 months. Or buying all kinds of electronics and furniture from the 'don't pay for a year' realtors. And they hand out Credit Cards with abandon.

I've seen people open their wallets and they have 5 or more CC's. I ask them about it and they seem to think it's some kind of status symbol that puts them in a different category from what they really are which is just a worker class citizen.

I only have one CC (that I keep at home) which I have only used once in the last few years and that was to pay for a Vet bill for the dog, and I only used it because my debit card, which I also never use, had a $500.00 limit on it.

All debt is a burden and one should make sacrifices to avoid it. If it means you don't get the shiny big screen or car, so be it..