Albertans Concerned About Interest Rate Hikes & Housing Bubble
Published
7 years ago
6 minute read
A new survey released by MNP LTD finds that Albertans are concerned about the uncertainty of a potential housing bubble and impending interest rate hikes, adding financial stress to households already carrying a record level of debt.
Six in ten (61 per cent) of Albertans and nearly half (48 per cent) of Canadians homeowners are concerned about the impact rising interest rates will have on their finances. At the same time, more than half of Albertans (59 per cent) are worried about the potential impact that a decline in house prices might have on homeowners.
“So many are over-leveraged right now. Making matters worse, many are not making regular payments against the principal. With the financial stress of the downturn, and the threat of an increase in interest rates, many are going to find it even harder to make ends meet,” says Donna Carson, Licensed Insolvency Trustee at MNP LTD, a division of MNP LLP.
Nearly four in ten (39 per cent) homeowners in Alberta say that they will be faced with financial difficulties if the value of their home goes down, the highest proportion among other provinces. Even if home values don’t decline in the near future; three in ten Albertans (31 per cent) who have a mortgage agree that they are ‘in over their head’ with their current mortgage payments.
Homeowners aren’t the only ones concerned. Nearly eighty per cent of Albertans rate their ability to cope with a 1% interest rate increase as less than optimal. The vast majority of Albertans (83 per cent) would have difficulty absorbing an additional $130 per month in interest payments on debt.
“We’ve become far too comfortable paying only the minimum payments on our debts. It’s time to start assessing our ability to pay down those debts and ask ourselves if we can truly afford them if there is a rate change,” says Carson.
When asked about their personal debt situation, the majority of Albertans don’t feel optimistic. Nearly seven in ten (69 per cent) rated their debt situation as less than good, while sixteen per cent rated their situation as bad. On a scale of one to ten, from terrible to excellent, Albertans gave themselves an average rating of 6.
With nearly four in ten Albertans (38 per cent) finding themselves within $200 per month of financial insolvency, there is little wiggle room left to pay any unexpected bills or debts. If that amount is increased to $300 per month, a staggering forty-two per cent of Albertans would be on the verge of insolvency, with nearly one in four (22 per cent) not making enough to cover their bills and debt payments. Four in ten (42 per cent) say they are concerned about their current level of debt.
“Albertans should be bracing themselves for what’s ahead, especially those who already consider themselves to be in financial distress. Seek professional advice and start creating a realistic plan to deal with that debt,” says Carson.
Survey Highlights include:
Three in ten Albertans with a mortgage agree they are ‘in over their head’ with their current mortgage payments
Nearly four in ten homeowners in Alberta agree they will face financial difficulties if the value of their home goes down, six in ten Albertans think we’re in a housing bubble
Six in ten Albertans agree they are concerned about the impact of rising interest rates
Nearly eighty per cent of Albertans rate their ability to cope with a 1% interest rate increase as less than optimal
Over a quarter (27%) of Canadians with a mortgage agree that they are ‘in over their head’ with their current mortgage payments. This includes more than one in three Quebecers (35%), followed by residents of BC (32%), Alberta (31%), Atlantic Canada (25%), Saskatchewan and Manitoba (23%), and Ontario (21%).
Half of Canadians (51%) are concerned about the potential impact on home owners that a decrease in house prices might bring.
Over forty (44%) of Canadians are within $200 of financial insolvency at the end of the month, down 8 points from March 2017, and 12 points from September 2016.
Women are significantly more likely (48% women vs. 39% men) than men to be within $200 of insolvency at month-end.
Gen X’ers are more likely (48%) to be within $200 of insolvency at month-end, compared to Millennials (43%) and Baby Boomers (40%).
Half of Canadians (50%) are $300 per month away from being financially insolvent.
Atlantic Canadians are the most likely to rate their personal debt situation as ‘bad’ – the highest in the country at 22%
While two in three Canadians (67%) think we’re in a housing bubble, only a minority (43%) expect that bubble to burst through a decline in house prices in the next year. Half (51%) are concerned about the potential impact on home owners that such a decrease might bring.
Pushing back the date would preserve the pensions of some of the MPs who could be voted out of office in October 2025.
Aides to the cabinet of Prime Minister Justin Trudeau confirmed that MPs from the Liberal and New Democratic Party (NDP) did indeed hold closed-door “briefings” to rewrite Canada’s elections laws so that they could push back the date of the next election.
The closed-door talks between the NDP and Liberals confirmed the aides included a revision that would guarantee some of its 28 MPs, including three of Trudeau’s cabinet members, would get a pension.
Allen Sutherland, who serves as the assistant cabinet secretary, testified before the House of Commons affairs committee that the changes to the Elections Act were discussed in the meetings.
“We attended a meeting where the substance of that proposal was discussed,” he said, adding that his “understanding is the briefing was primarily oral.”
According to Sutherland, as reported by Blacklock’s Reporter, it was only NDP and Liberal MPs who attended the secret meetings regarding changes to Canada’s Elections Act via Bill C-65, An Act to Amend the Canada Elections Act before the bill was introduced in March.
As reported by LifeSiteNews before, the Liberals were hoping to delay the 2025 federal election by a few days in what many see as a stunt to secure pensions for MPs who are projected to lose their seats. Approximately 80 MPs would qualify for pensions should they sit as MPs until at least October 27, 2025, which is the newly proposed election date. The election date is currently set for October 20, 2025.
Sutherland noted when asked by Conservative MP Luc Berthold that he recalled little from the meetings, but he did confirm he attended “two meetings of that kind.”
“Didn’t you find it unusual that a discussion about amending the Elections Act included only two political parties and excluded the others?” Berthold asked.
Sutherland responded, “It’s important to understand what my role was in those meetings which was simply to provide background information.”
Berthold then asked, “You nevertheless suggested amendments to the legislation including a change of dates?”
“My role was to provide information,” replied Sutherland, who added he could not provide the exact dates of the meetings.
MPs must serve at least six years to qualify for a pension that pays $77,900 a year. Should an election be called today, many MPs would fall short of reaching the six years, hence Bill C-65 was introduced by the Liberals and NDP.
The Liberals have claimed that pushing back the next election date is not over pensions but due to “trying to observe religious holidays,” as noted by Liberal MP Mark Gerretsen.
“Conservatives voted against this bill,” Berthold said, as they are “confident of winning re-election. We don’t need this change.”
Trudeau’s popularity is at a all-time low, but he has refused to step down as PM, call an early election, or even step aside as Liberal Party leader.
As for the amendments to elections laws, they come after months of polling in favour of the Conservative Party under the leadership of Pierre Poilievre.
A recent poll found that 70 percent of Canadians believe the country is “broken” as Trudeau focuses on less critical issues. Similarly, in January, most Canadians reported that they are worse off financially since Trudeau took office.
Additionally, a January poll showed that 46 percent of Canadians expressed a desire for the federal election to take place sooner rather than the latest mandated date in the fall of 2025.
According to the Secretary of State’s office, Trump leads Harris by 184,935 in a 53%-46% split.
Former President Donald Trump was declared the winner Saturday night in Arizona, marking the final swing state for the Republican to collect in his landslide victory.
Arizona was the seventh and final swing state to be decided, securing Trump 312 Electoral College votes.
All but Coconino, Apache, Santa Cruz, and Pima counties favored Trump over Vice President Kamala Harris. Maricopa County, the source of dozens of electoral challenges including a partisan ballot review of the 2020 election, is currently favoring Trump by more than 78,000 votes. Trump lost the state to President Joe Biden in 2020 by little more than 10,000 votes.
According to the Secretary of State’s office, Trump leads Harris by 184,935 in a 53%-46% split.
Complete election results aren’t expected for at least another week, which is no different from previous cycles. Two-page ballots with dozens of judicial retention races and ballot propositions led to slower results in the days after polls closed. A new election integrity law enacted this year requiring polling stations to count envelopes before they can send off ballots added to the lag in results.
Both the Trump and Harris campaigns made Arizona a priority throughout the election cycle, either hosting rallies themselves or sending big-name surrogates.
Campaign volunteers descended on Maricopa County to join local activists who knocked on thousands of doors in the days before the election. Many residents complained about the barrage of phone calls, texts, emails, and flyers from numerous organizations.
