Reply to Andrew Duggan’s Facebook post
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Andrew, thank you for providing me with the opportunity to comment. Given the differences in markets and regions in Canada let’s just look at Newfoundland and Labrador.
In Newfoundland and Labrador I believe that we are already seeing a market correction. According to the Canadian Real Estate Association’s data linked here http://creastats.crea.ca/stjo/ the average residential price in NL peaked in 2014 and has been decreasing since.
How far will the market drop? I don’t imagine anyone can know for certain, though I would imagine that, given the headwinds facing our province’s economy, we have yet to see the bottom.
This chart from the Canadian Association of Realtors showing median prices in NL since 2006 certainly provides food for thought in terms of how much prices have risen since 2006. http://creastats.crea.ca/stjo/mls/mls05_median.htm#anchor01
We are already seeing an increase in insolvency related proceedings in NL – bankruptcies and proposals under the Bankruptcy and Insolvency Act are up 15.9% year-over-year. http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br03504.html
Consumer debt levels are at an all-time high. http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/canadian-households-still-adding-debt-but-pace-slowing-equifax/article26366796/
The Province has to cut back on spending, the Auditor General’s report last week demonstrates just how much we are overspending relative to our means. The Province cutting back will impact everyone given the magnitude of the deficit. “Paddon said that reducing the $2B deficit will mean government will have to either increase taxes, dramatically cut spending, or both.”
“The auditor general said it won’t be enough to wait for oil prices to rebound. He noted that even last year, with oil prices around $70 per barrel, the province still had a $1-billion deficit.
“We’ve seen with oil prices is they’re volatile, they’ll go up, they’ll go down. So you really have to have an expenditure level that accommodates that volatility and the uncertainty around future oil prices,” he said.” http://www.cbc.ca/news/canada/newfoundland-labrador/terry-paddon-newfoundland-labrador-deficit-not-sustainable-1.3425176
I love Newfoundland and Labrador and believe that we have a bright and prosperous future ahead of us. However, it appears as though we have some difficult years ahead as we grapple with the realities of our resource based economy, demographics and geography.
Did You Know?
Many people who file for bankruptcy get to stay in their home.
In Newfoundland and Labrador, you can keep your RRSPs – even if you file for bankruptcy.
Many people who file for bankruptcy are able to keep their vehicle.
Most bankruptcies are NOT published in the newspaper.
Student loans can be included in a bankruptcy if they are more than seven (7) years old.
A consumer proposal is an alternative to bankruptcy that can only be filed with a licensed trustee in bankruptcy.