Post by
malx1 on Mar 08, 2024 12:42pm
Alberta Advantage = Less Mortgage Debt
Out in BC we are slowly sinking into recession, it's inevitable.
Talking with peers, they have $500k-1.3mm mortgages to re-finance over next 24mo.
The banks are calling already, telling them that they cannot afford to keep the house at any mortgage rate above 4%.
We are talking "forced sales" and "forced downsizing" and across many sectors there's corporate cost-cutting going on which means "layoffs"
Imagine losing your job right before you have to refinance the $1.25mm house that you still owe $1.1mm on............................................................................................
Run the numbers:
2020, $1.1mm @ 1.75% = $19k/yr Interest cost
2025, $1.1mm @ 5.50% = $60/yr Interest cost
Where the heck will they come up with $40k/yr after-tax to carry the fancy new mortgage cost??
Sell the BMW, sell the Harley Davidson, sell the Modern Artworks, that might get you by for a few years, but probably not.
How come nobody saw this coming? Maybe too busy dreaming about $1mm houses going to $2mm
Kasking always says that "Trees Don't Grow to the Sky"
He's right.
BC in a whole heap of trouble, everyone frozen with re-fi fear.
Are we at Credit Crisis 2.0 for overheated markets like Toronto and Vancouver?
The BC 30-somethings and 40-somethings who were cheering on RE prices to the moon are now wondering if the next "MOVE" is to Alberta!!
Wasn't long ago I was working in the brewery with people who had re-located from Edmonton and Calgary, they sold their RE at a loss to get to BC - Greener pastures they said! No, that was just the oceans of Weed Plants, another failed financial experiment by the fast money crowd.
Hate to say it, tough times ahead for the families who went head-first into the RE 'game' when mortgage rates were 1.75%. Game over at 5.00% today. Yeeeeeeesh.
........................................
Makes sense why GH is being cautious about pace of dividend hikes.
These guys are smart!
Might be another 'popcorn and peanuts' AGM 2024, we are all counting on TheBridge to chip in for ham sandwiches and maybe a few apple juices.