When we see the skyrocketing housing prices in St. John’s and in the immediate area, it’s easy to think of other boom and bust economies … Alberta and Ireland are two that come to mind right away. In Alberta, housing prices were about the same as here in St. John’s – young people were rushing to buy seriously overpriced standard three-bedroom homes for $300k and more. Thirty-five year mortgages were the norm with minimal down payment. Now, many of those people are stuck with homes that are worth in the $100k range and they have no way of getting out of their debt except for perhaps considering bankruptcy. Similarly, the days of Ireland enjoying one of the fastest growing economies in Europe are over, at least for now. The story is all too familiar, as easy credit fueled a housing bubble that burst and damaged consumer confidence.
The housing prices in St. John’s and area are obscenely artificially high as developers rush to build more boxes made of ticky-tacky and cash in on the bonanza. I just feel sorry for the young people who are going to be burdened with these debts for the rest of their lives. What goes up so very quickly will come crashing down very fast without consideration of who gets hurt.