Real Estate going to be Cheap in Alberta?


JLM
-1
#1
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
+3
#2  Top Rated Post
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
-1
#3
Quote: Originally Posted by Retired_Can_Soldier View Post

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
+1
#4
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
+1
#5
Quote: Originally Posted by JLM View Post

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..
 
taxslave
+2
#6
Don't worry. TrudOWE will bail out the banksters. Bank shares are always a good investment.
 
MHz
#7
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
+1
#8
Quote: Originally Posted by JLM View Post

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
-1
#9
Quote: Originally Posted by davesmom View Post

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
+2
#10
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 ***.
 
MHz
#11
Wasn't that the woman who refused to fire other people so she got canned instead?
 
darkbeaver
#12
It's time to buy the frontier back, under proper mabnagement it could be a text book example of innovation.
 
Angstrom
#13
It's always been a boom bust environment.
 
bobnoorduyn
+3
#14
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.
 
MHz
#15
Sounds a lot like 1984 to me.
 
tay
#16
Quote: Originally Posted by bobnoorduyn View Post

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
+3
#17
Quote: Originally Posted by JLM View Post

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
 
Sons of Liberty
+2
#18
Banks and insurance companies are legalized thieves.
 
B00Mer
#19
Quote: Originally Posted by Sons of Liberty View Post

Banks and insurance companies are legalized thieves.

Communist.. guess you're voting for Bernie.
 
tay
+1
#20
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..
 
Dixie Cup
+1
#21
Quote: Originally Posted by tay View Post

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..



Wow, such common sense. You are 100% right. The record (so far) in our office was set a couple or more years ago - a couple came in to declare bankruptcy and they had 28 (yep twenty-eight) credit cards between them, all maxed out. Who the *** needs 28 cc's? OMG!!


I have asked some individuals why they have, (as you stated 5 or more) and have received answers like - well they kept sending me applications that I was pre-approved or kept sending them to me in the mail (??).


I've asked them, (kindly lol) if they've ever heard of a shredder (not really but I sure want to). Or, they kept raising my credit limit - and I would ask why they didn't contact the financial institution to lower it back down and they would respond - oh, I can do that? Seriously???? You have to shake your head as it can be funny and so frustrating at the same time.


I too have only 1 CC and I've travelled overseas and to the U.S. and have NEVER had to have any other. It has no rewards on it thus I have no yearly fees. It has done me well.


FYI - if you can't afford it in cash, you can't afford it on credit! Bottom line. (Just a bit of free advice). If you use a cc, then TRACK what you spend so that you know EXACTLY what your bill is going to be at the end of the month and that you can actually pay it ALL. Not paying your cc bill in full means that whatever you have purchased has just increased in cost. (You're welcome lol)


JMHO
 
DaSleeper
+1
#22
One credit card which I haven't used in three or four months since I only use it with pay pal online shopping, which I don't do these days because of the exchange rate....
I use mostly debit, with a $500 maximum single purchase, but since i am known to most of the bank employees of my bank, one phone call is all that is needed for them to raise my limit for a single purchase, then it goes back down...(one of the perks of having lived in a relatively small town all your life)

Quote: Originally Posted by Dixie Cup View Post



FYI - if you can't afford it in cash, you can't afford it on credit! Bottom line. (Just a bit of free advice). If you use a cc, then TRACK what you spend so that you know EXACTLY what your bill is going to be at the end of the month and that you can actually pay it ALL. Not paying your cc bill in full means that whatever you have purchased has just increased in cost. (You're welcome lol)


JMHO

If you have an IPhone ...one app I recommend is "Accounts" by SVT software...I've been using it for over 10 years with an Ipod at first then with the phone.....It's possibly the only reason I wouldn't switch to an Android phone....SVT doesn't make that app for android yet!
 
taxslave
#23
Quote: Originally Posted by tay View Post

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..

Credit cards can be used to your advantage. If you understand how they work. I just got a new PertocanCBC card because that is where I buy gas every two days. Get petropoints which are good for cheaper gas and it is a cash back card.Doesn't have a very high limit either. But I treat my cards like cash or debit card.
 
Dixie Cup
#24
Quote: Originally Posted by taxslave View Post

Credit cards can be used to your advantage. If you understand how they work. I just got a new PertocanCBC card because that is where I buy gas every two days. Get petropoints which are good for cheaper gas and it is a cash back card.Doesn't have a very high limit either. But I treat my cards like cash or debit card.



And that's the catch. They ARE useful if you use them properly. I tell my clients that to use a cc to their advantage, you use someone else's money while yours remains in the bank - and when the bill comes in, pay it off completely. That way, it hasn't cost anything. It's basically a matter of discipline and I tell my people if you don't have that discipline, don't get a cc!! There are prepaids and debit credit cards that are very useful too but you must have the money in order to use them so you're never over-extended.


Unfortunately, most people use cc's as personal "loans" and figure when they're broke, that's the time to use them. Guess the banks and other financial institutions have done their jobs well!!


JMHO.
 

Similar Threads

2
golden real estate handcuffs
by darkbeaver | Mar 11th, 2014
0
Buffett: Real estate slowdown ahead
by Kreskin | May 6th, 2006