Star 3, truth 0

SL4

The descent into media hell continues. Not long ago the nation’s biggest paper, the Toronto Star, announced a 65% plunge in profits. Ad revenues for the paper are down 11%, one good reason that copyeditors – at the very heart of editorial accuracy – are being outsourced. It’s enough to make you wonder how newspapers will survive./

But now we know.

You take a strong brand, a history of crusading for the little guy’s issues, plus 121 years of independent journalism, and sell it out to advertisers. Like the Royal Bank.

This week The Star published the page below on how buying a condo earns you $420,000 while renting one costs $480,000. Seriously. It’s right there in the paper. Must be true.

rent-buy

It’s hard to know how to respond. If this were an ad for RBC Mortgages, well, we’d just snicker and ignore it. But instead it was clearly written by RBC, then run as editorial. Despite a line saying ‘sponsored section’ (aren’t they all?) the expectation of readers is that ads are different from stories. Or, in this case, fact-filled graphics. But that’s the point. This is why RBC whored the Star. It gets an ad that looks like it isn’t.

But you know all that. There are few touchstones of truth left. Everybody has a price. Especially when your profits just fell by two-thirds.

Well, in case your impressionable 27-year-old, basement-dwelling, failed-to-launch kid read this and already has a tryst planned with the irresistible RBC loans lady, you might want to clarify a few things. Like, why would we compare buying one-bedroom condo in the burbs (selling for $240,000) with renting a downtown pad (for $1,600) that’s probably worth $400,000?

Of course! It makes renting look worse. In fact a one-bedroom condo in a hood where condos sell in that price range would rent for $1,000. But what’s a 37% discrepancy when you have loans to sell?

As for the carrying cost of the condo bought for $240,000 with 20% down, the piece fails to factor in the lost earning power of the almost-$60,000 pumped into the deal at closing. Once that is added (about $4,000 a year, at 7%), the true carrying cost of owning is almost double that of renting. Ouch.

But wait! Look at ‘The Payoff’ – the owner gets $420,000 in estimated equity after 25 years while the renter gets zero, and has paid $480,000 in rent. How could this be a more open-and-shut case for home ownership?

First, nobody lives in a one-bedroom condo in suburbia for a quarter century. It is medically impossible. Second, this example is based on 25 years of five-year closed mortgage rates of 3.5%, which is absurd. In 2018 this will look quaint. Like we now think of pet rocks, or Mike Duffy. (BTW, notice how no mention is made of mortgage rates changes while there’s a warning about ‘rent increases.’ Classy.)

As for eternal appreciation in the value of a condo, this is a joke when high-rise markets in Toronto, Montreal and Vancouver are showing negative sales and wobbling prices. An excess of supply over demand, shoddy construction and mortgage changes that weed out moneyless buyers suggests condos could be in for a long, painful slide. And then there are the massive transaction costs of selling real estate to consider, potential illiquidity during downturns and the unexpected ‘special assessments’ that can come when living in an aging structure you don’t control.

Who’s this crap aimed at? Right. Impressionable, unsophisticated financial illiterates.

In the pages of The Star, they are at home.

180 comments ↓

#1 TurnerNation on 05.17.13 at 9:08 pm

From the ‘DonDWest’ dept.: My online brokerage’s HR claim:

“70% of [our] staff are immigrants to Canada with 50% having arrived within the last 5

years”.

At 1:13 in this video:

http://www.youtube.com/watch?v=RGBSIh0YUDs&feature=player_embedded

What about the rest of us – do we stand even a chance?

I’ve enrolled into a part-time MBA program (Obediance Certificate!).
Hopefully it will increase my rank on those Corporate Hiring Matrix scales.
Clearly I have several discriminating marks against me, already. :-(

Say is alcoholism a disability? Check that box? I can fake it.

#2 Tom Vu on 05.17.13 at 9:13 pm

My death ray (patent pending) will remove all posts ahead of me.

#3 george on 05.17.13 at 9:13 pm

Instead of moving to reverse the twin risks of low interest rates and rising debt, Canadian policy makers seem intent on keeping the game going for as long as possible

Terence Corcoran: Canada’s policy makers fixed on doing nothing

It looks to me like the bell signalling the top in the Canadian housing market has been rung:

NEW YORK (Reuters) – Canada’s soaring consumer debt is backed by solid assets, Prime Minister Stephen Harper said on Thursday, saying he was more worried about economic problems outside the country.

Harper says household debt not his biggest worry

#4 shanks on 05.17.13 at 9:14 pm

Can it be? Did I type fast enough?
AM I FIRST?!?!?!!!

#5 shazam on 05.17.13 at 9:14 pm

Wow, I’d like to see RBC securities run an ad like that. Too bad their mortgage division doesn’t have a compliance officer.

#6 Condo Minion on 05.17.13 at 9:22 pm

Mr. Turner,

I am in possession of a cell phone video that will be of great interest to you, sir. My wife (silly girl) thinks it is just a mashup of our kid’s chaotic sixth birthday party, with fat clowns holding cigars and blowing balloons, and a pony. I know much better.

To a discerning eye, the images, however grainy, are clearly of you, apparently smoking crack with some other lapsed conservatives, on the porch of the Lunenburg cottage that you fraudulently claim as your official Senate residence so you can bilk taxpayers for a housing allowance. As a current (unpaid) Toronto Star subscriber, I am very confident about the integrity and provenance these conclusions.

Yes, yes, I know, you will say, “But I’m not even in the Senate!” “Ridiculous!” So you say.

Mr. Turner, you are a former politician and media personality. You have performed every bit as much valuable political public service, worked just as hard, in the last year as an average Senator.

That makes you a Senator. Don’t try to deny it.

On the video, you can clearly be heard putting down Justin Trudeau, claiming that “my sixpack is way tighter than that wimp’s.” Such shameful hubris coming from you is a discredit to the entire Red Chamber.

So……. Senator Turner …or perhaps you’d prefer to be called…..” an allowance-scamming media-crack-ho”….. what is this video worth to you? (Or shall I put that question to crowd-source funders from among your blog-dawgs? Hmmm!? Hmmm!?)

I can tell you how much it is worth to me, Senator. I have a HELOC of $90,000 on my 350 square foot half-million sure-thing investment condo in Toronto that needs paying off. Pronto. My condo salesman, who tells me he is soon to join you in the Senate, assures me this baby will skyrocket once this soft landing is over. Six months, tops, he tells me. But cash is a little tight right now.

Don’t wait for the translation into Nova Scotian Gaelic, Senator Turner!! You know what must be done!

I suggest you get on the horn to your bff Nigel Wright, Senator Turner, and arrange an appropriate gift transfer asap. I am sure you still have the PMO on speed dial.

Do not delay. This video is far too interesting to ignore. I’d hate to accidentally press the “share” button on my Facebook account……

Sapere aude, Senator
—————————————————————

(I am soooo not under water anymore …..Sweet!)

#7 Josef on 05.17.13 at 9:23 pm

Josef’s back ladies, OH YEAH!!!

Dellen Millard purchased a condo the day after the Bosma disappearance for $627k which was advertised for sale at one point for 740k. That’s about a 16% price reduction. Personally I hope he loses all his money, but this proves that even the wealthy can be greaterfools.

#8 JSS on 05.17.13 at 9:27 pm

Garth –
Is Royal Bank (and the other big 5 banks) heading into financial trouble?

Their desperation as seen in the Tor Star ad, and in your piece above, sure look like it.

#9 Dean Mason on 05.17.13 at 9:29 pm

I will say it now and I will say it
again.House,condos,town homes,townhouses,cottages,etc. are all just a place to live.You should buy it to match your lifestyle and true affordability not what a lender or mortgage broker tells you.

Once you look at any property that you live in as an investment instead of an asset you can sell later for a lower or higher price then you will get in long term financial trouble that makes you wish you never were born.

People will always learn the hard way.They are preying on inexperienced,financial illiterate,lazy people who do not research the numbers,too trusting people.

#10 Smoking Man on 05.17.13 at 9:30 pm

im iin the zone bubble heads, today I took forex up to 2 million in play got killed 16 k in the hole.

Right now 4 k down, batman 6 to 1 wrong..
Vi
The smoking man, rules,
Prostitute to the left, and to the right…. Damb got to pass, 30 year anniversary,

Why am I so weak in my old age……

Damn

#11 timmy on 05.17.13 at 9:31 pm

ho hum…

#12 skooby doo on 05.17.13 at 9:35 pm

Newspaper and bank with moral?

Give me a break. A whore has more decency.

#13 george on 05.17.13 at 9:38 pm

America’s IRS Scandal Is Better Than Canada’s

#14 Stomper on 05.17.13 at 9:38 pm

WOW – even our MSM isn’t that reckless with the truth. Surely Canada has some media regulations to stamp out this misleading piece of garbage.

Would love to see a “real” comparison to countee this one!

#15 Star 3, truth 0 — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate – The Affluent Boomer on 05.17.13 at 9:40 pm

[...] via Star 3, truth 0 — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#16 Smoking Man on 05.17.13 at 9:45 pm

Deleted

#17 Bill Gable on 05.17.13 at 9:46 pm

Thanks for doing the math, for us Math Challenged, Mr, Turner.
On another matter – this type of ‘hypervertising” was not considered kosher for the 40 plus years I was in media.

The Board would never allow a commercial enterprise cross the line, like we have seen here.

Frankly, I think it speaks to the fear in the heart of the morons that have been handing out big cash to mouth breathers. There is a lot of fear creeping it at the edges.
I’m watching the “For Sale” signs sprout and and then wither, like Mike Duffy and Pamela Wallin, in the glaring light of day.

#18 Smoking Man on 05.17.13 at 9:56 pm

DELETED

#19 Scully on 05.17.13 at 9:58 pm

Saw an ad for a show called Money Morons with Gail Vaz Oxlade. I think that pretty much sums up the vast majority of the Canadian population. Money morons. Condos and ponies for everyone!

#20 LJ on 05.17.13 at 9:59 pm

Bang on Garth!!!

They also fail to recognize that the “renter” downtown does not need to spend 2 hours getting to work and pay for that shiny new BMW (another depreciating asset).

And, why would one buy a condo when it is hazardous to your health…

#21 visorman30 on 05.17.13 at 10:10 pm

Blatant advertorial content like this reeks on both sides and should be an early warning. If times are good then really there wouldn’t be a need to run something like this. A lot of magazines are guilty of this type of content and it signals a significant decline in the state of the media.

I don’t think it’s much of a secret that the newspaper industry has taken significant hits. In your opinion, what is the underlying cause for this and is there a credible alternative to the mainstream newspapers?

(your blog is great but it’d be hard for it to be truly considered mainstream, yet…)

#22 blokexistentialist on 05.17.13 at 10:11 pm

Newspapers can’t die fast enough. Keep stamping on them lest one of the little critters escapes to lie another day.
While doing a reporting internship on Parliament Hill in the late ’90s (the defunct Southam chain actually had a budget for training in those autum days of Canadian journalism) I was amused to learn that three cameras were always trained on Mike Duffy, star journalist, to ensure he could be sized down to human proportions for TV viewers.

#23 Ronaldo on 05.17.13 at 10:16 pm

#10 Smoking Man – ”Why am I so weak in my old age……

Damn”

May have something to do with years of ”cigarettes, whiskey, and wild wild women, they drive you crazy, they drive you insane”. Remember that one?

#24 jan on 05.17.13 at 10:16 pm

This country is going down to hell by the day
First, mike Duffy stealing $90,000 form tax-payers, and all the other crooks stealing our money and now there are houses burning in fugly Vancouver because greed is reaching new heights here.

Gosh, what’s next
I sure feel like a fool for living an honest life while everybody else around me is stealing the sh%$ out of this country
I AM ANGRY TODAY

#25 I'm stupid on 05.17.13 at 10:18 pm

Hi Garth

The real problem is that financial literacy isn’t taught in school. I guess managing money, the use of leverage and investing for retirement aren’t as important as drama.

#26 T.o. and GTA bidding wars debunked -May 17 on 05.17.13 at 10:18 pm

http://recharts.blogspot.ca/2013/05/to-bidding-wars-debunked-may-17.html

http://recharts.blogspot.ca/2013/05/gta-bidding-wars-debunked-may-17.html

#27 Boombust on 05.17.13 at 10:19 pm

Funny too, how a 3 bedroom, 2 bathroom Palm Springs house in the exurbs of the BIG BIG SMOKE (Los Angeles-yuck!) can only fetch a measly -$200K in today’s market.

Sunshine, anyone? (Only up your a$$, I $uppo$e.)

#28 Ronaldo on 05.17.13 at 10:20 pm

#10 Smoking Man –

”Why am I so weak in my old age……

Damn”

Maybe it has something to do with all those years of “cigarettes, whiskey, and wild wild women, they drive you crazy, they drive you insane.” Remember that one? Brother used to sing it all the time. He sounds a lot like you do. Have you tried geritol?

#29 Concessionman on 05.17.13 at 10:26 pm

And isn’t condo fees of $229/month out there in dreamland? Aren’t they considerably more these days?

#30 Ronaldo on 05.17.13 at 10:28 pm

Here you go Smoking Man….just for you….

http://www.youtube.com/watch?v=x2Gz6Wndg3Q

#31 YYC on 05.17.13 at 10:29 pm

Shame on media…!

No warnings on Property tax, condo fee, utilities either…

Great work Garth…Thank you!

#32 45north on 05.17.13 at 10:30 pm

JSS: Is Royal Bank heading into financial trouble?

it sure looks like it. 3 points:

a condo in the suburbs is not comparable to a downtown condo
estimated appreciation of $180,000 is no where to be found in the mortgage documents
5 year closed mortgage has to renewed 4 times. It explicitly says that the 3.5% is only for 5 years.

You know Garth, the Royal Bank could respond on this blog. I mean maybe not tonight but it could.

#33 Ralph Cramdown on 05.17.13 at 10:45 pm

The comparison makes sense if you’re Superman, because the commute from the ‘burbs to your day job at One Yonge or 444 Front St. W. takes almost no time and costs no money.

#34 Flummoxed on 05.17.13 at 10:51 pm

Impressionable, unsophisticated financial illiterates

Would these individuals fall into this category

Sen. Warren demands to know why criminal bankers aren’t being locked up

http://www.rawstory.com/rs/2013/05/15/sen-warren-demands-to-know-why-criminal-bankers-arent-being-locked-up/

#35 jess on 05.17.13 at 10:57 pm

…. the tycoon …, info graphics with just the facts!

http://www.thestar.com/life/modernmoney/2013/04/19/infographic-it-s-your-money-a-practical-guide-tycoon-to-be.html
===========

negative angry and ubiquitous : political advertising in 2012
Erika Franklin Fowler and Travis N Ridout https://www.documentcloud.org/documents/699752-negative-angry-and-ubiquitous-political.html

#36 AK on 05.17.13 at 11:01 pm

“$800.00 Insurance.”
——————————————————————-
Geez. I wish my house insurance would stay frozen @ $800.00 for 25 years.

#37 grant on 05.17.13 at 11:05 pm

Notice a key omission: The article states “not including rent increases”, but omits any mention of “not including interest rate increases” on the other side. Not exactly a balanced view. I’m about as much as a capitalist as they come, but I have no place in my life for greedy, deceptive, unethical, self serving people. As far as the banks being forced to offer only 25 year amortizations, i say the government should butt out. Let them offer whatever amortization periods they want to take the risk on. The one caveat, get rid of the CMHC. If the banks/credit unions aren’t protected by the taxpayers, the reckless lending will most likely end. Let the market take care of itself.

#38 CantRememberMyName on 05.17.13 at 11:07 pm

Nice article. Thank god I was an owner from 95 to 11. I wound up renting in a building built in the 70s on Queens Quay. It’s a bachelors. 700 sq ft. Overlooking the lake. LOL. Isn’t that a 2+1 in the new buildings these days? Without the brick view?

#39 Tom Vu on 05.17.13 at 11:10 pm

Smoking Man get spanked today !

#40 jess on 05.17.13 at 11:11 pm

i’m stupid said …The real problem is that financial literacy isn’t taught in school…

Actually it is although, perhaps these advice centers do a better job. ;^)

#41 jan on 05.17.13 at 11:11 pm

TIME FOR SOCIAL UNREST

The rich run the show here and everywhere else.
There is over 450,000 millionaires in Canada today.
Canadian corporations are reporting record profits yet hire mostly foreign cheap workers.
Politicians are self-serving and only care about their kick-backs and fat pensions ahead.
The rich keep lobbying governments’ to keep them wealthy by tuning economic policies such as interest rates etc to be low, thus inflating value of their land ownership and at the same time indebting Canadians with 165% debt load ( highest in the world )on credit and mortgages they will never repay.
Political correctness is used to muzzle law obedient Canadians and to force them to accept the new way of wealthy Lords who run this place, effectively destroying the middle class and working families.
Selective immigration policies destroying further Canadian way of life by bringing in wealthy who will never contribute to our way of life except for making our living a lot more expensive and ensuring the average Canadian will never own their own home.

I am tired of all this shit and want to take it to the streets.
Anyone with me?? – thanks for letting me unburden myself.

#42 Carpicker on 05.17.13 at 11:12 pm

http://i39.tinypic.com/n9vrm.jpg

#43 Controller on 05.17.13 at 11:15 pm

As an Air Traffic Controller, I don’t like that picture! :)
I helped talk my ATC buddy out of buying a house in Cloverdale a few days ago. He was weak, but now he is strong again. I kept telling him, “What would Garth say?”
Yeah JB, I’m talking about you. Thanks Garth.

#44 Mr Buyer on 05.17.13 at 11:20 pm

The newspaper advertisement is a nice summation of what most people (including myself prior to Japan) think of a house as an investment. You buy a house and it goes up in value and you sell it. This is re-asserted over and over again. Advertising is often thought of as a sophisticated interplay of human psychology and artistic representation which it certainly can be but if advertising has a heart and soul it could be distilled down to one word and that word is repetition. Sure one must develop an understanding of your target audience and packaging of a message should consider word choice and implied messages but degree of repetition is likely the greatest predictor of returns. In the battle for hearts and minds the target is often the mythical average jane or joe that typically have no time for long winded explanations even if they are the truth. To counter saturation concise brevity repeated over and over again is an effective tactic. The message should remain constant even if the names and settings are changed to promote variety which promotes re-engagement with the message. Different aspects of a given body of propaganda can be countered but it is best to do so in separate messages in a quick and clean manner. Everybody understands the power of the press yet it is allowed to commit fraud on a scale hard to fully appreciate. Where are the courts in all this. I guess the legal profession en mass holds mortgages that are justified by inflated house prices. There is little likelihood of anything less than a crash where houses are concerned due to the corruption of checks and balances as a result of widespread vested interest on individual levels. The thing is the money always runs out eventually.

#45 Martin Lazi on 05.17.13 at 11:25 pm

#10Smoking Man on 05.17.13 at 9:30 pm
im iin the zone bubble heads, today I took forex up to 2 million in play got killed 16 k in the hole.

Which pair dude? Dont tell me you went short on usd/cad.

Check out aud/usd because the RSI is at the lowest level since 2010 bro. Looking at the past three years in aud/usd, declines to 25 in the RSI have been followed by some impressive bounces. I expect the bounce at least 200 pips. Bet big, win big. Good luck

#46 Aardvark Phartz on 05.17.13 at 11:36 pm

Wow Smoking Man gets 2 deletes in a row!

Is this a new high in lows?

#47 espressobob on 05.17.13 at 11:56 pm

The best way to live in the GTA…. RENT! While I pay my landlord less than a G note each month I retain my right to bitch about any problems that should arise.

Being in this ‘OLD’ building I have a nice view of the lake and a bedroom that can hold five queen sized beds. Problem is I can’t handle that many amazons all at once! Maybe I need help?

#48 rp1 on 05.18.13 at 12:07 am

Watch out RBC, the “old school” drug dealers are competing for coverage in the Star.

#49 Dr. Hoof - Hearted on 05.18.13 at 12:36 am

Another example of desperate media:

===================================

Editorial: Time to stop keeping kids immune from jab

ENOUGH is enough. The Sunday Telegraph and Daily Telegraph have launched a pro-immunisation campaign to protect vulnerable children.

Since Sunday, we have been accused of denying human rights, of ostracizing unvaccinated children and unfairly judging parents who make a health choice for their children.

But the overwhelming response to the #NoJabNoPlay campaign has been positive.

More than 2000 people have signed our petition. A number that is continuing to grow virtually by the minute.

Most parents are rightfully fed up with those who put other people’s children at risk.

http://www.dailytelegraph.com.au/time-to-stop-keeping-kids-immune-from-jab/story-e6freuy9-1226635389528

#50 Toddster on 05.18.13 at 12:59 am

Realistically it’s not just the Toronto Star that caves in this classic fashion. Most online media has.

It’s amazing how many people – even business owners – have a difficult time (it would seem) doing plain math.

We considered buying in the Maple Ridge area, but a quick evaluation of home prices, mortgage payments and our ridiculously low rent moved us to renting.

There’s only three types of peeps pn this planet – sheepdogs, wolves and sheep.

Which are you?

#51 Pro Renter on 05.18.13 at 1:35 am

I felt compelled to share my recent buy/rent comparison with a recent sale in our townhouse complex:

Estimated property value: $270,000 (listed $286000)
Estimated annual property tax: $1800 ($1200 with grant)
Estimated monthly strata fees: $250
Estimated annual insurance: $900
Utilities: equal for both renting and buying

Total monthly cost for buyer with 20% down (25yr am, 2.99%, 5 yr fixed): $1025 + $100 + $250 + $75 = $1450
Total monthly cost for renter = $1275

Total 5 year cost to buyer, including lost opportunity of downpayment (@6%) and cost to sell: $117500
Total 5 year cost to renter, including investment returns (@6%) on initial unused downpayment and regular additions of the difference from owning: $55500

In other words, if we wanted to buy the almost identical unit we are currently renting, the $270,000 townhouse would have to become a $330,000 townhouse in 5 years just to break even with renting. That means an annual growth of about 4%. Plus if our plans changed and we wanted to move early, we’d face an IRD to boot.

Renting looks just fine right now thanks :)

#52 sideline sitter on 05.18.13 at 1:45 am

I saw this and was almost going to sign up for Toronto Star login to argue, but figured ‘why bother’?

#53 Yellow rox rock! on 05.18.13 at 2:13 am

I don’t know if I’m with you on this one BigG. I think that many -if not most- of their readers would quickly and easily identify the “article” as being an advertisement.

#54 Gunboat denier on 05.18.13 at 2:29 am

41 Jan – I take it you’re not one of the 450000. Maybe
you should work on that.

#55 offgridder on 05.18.13 at 2:31 am

I may be 27 but I am not impressionable. This pathetic blog has taught me better than that. I have “Big Plans” and still live in a travel trailer :) Better than the basement!

#56 Dean Mason on 05.18.13 at 3:08 am

To #29 Concessionman

I read that the average condo fees in Toronto are $450 a month in 2012.What is more scary is that if they rise at a cautious average calculation of 4.00% annually per year in 25 years the average Condo fees would be $1,200 a month.

Also banks,lenders only use 50% of condo fees for mortgage qualification purposes.There are some older condos in the west end in Toronto that sold for $60,000 in 2012 but the monthly condo fees are $882 a month.This would cost $2,352 per month in 25 years with the same cautious calculation like above,YIKES!

Condo fees paid for owners of properties are like annual management expense ratios paid for owning mutual funds.It sucks big time.If a condo that costs $450,000 and the condo fees are $500 a month then it’s a 1.33% annual fee for owing this condo.

#57 Buy? Curious? on 05.18.13 at 3:15 am

Is everyone in Toronto on CRACK?

They should legalise marijuana so that a whole new industry could spring up and provide jobs to these basement dwelling millenials who are too soft to get into construction (Play Dates? pfft.), too smart to become a real estate agent (Is now a good time to buy?) or too lazy to become anything more than a barista at some hipster coffee bar (meh).

http://www.youtube.com/watch?v=gypGP2g2lxs

I’ve said it before and I’ll say it again, ROB FORD IS THE GREATEST MAYOR TORONTO HAS EVER HAD!!!!!

#58 Buy? Curious? on 05.18.13 at 3:32 am

Here’s a link, mofos, to how to turn green into gold! This blog is about economics, real estate, money and the road ahead so call your crack smoking, expenses fiddling politicians and get marijuana legalised!

http://www.guardian.co.uk/society/2013/may/17/cannabis-colorados-budding-industry

#59 Stephen Harper on 05.18.13 at 3:54 am

Garth, Excellent post – where did you get all these greater photos?

#60 TheRealTruth on 05.18.13 at 3:55 am

I’m back!

Check out my previous predictions over the last 4-5 years. You would swear that the future can be seen!!!

SmokingMan… I was a great mentor to you. Acknowledge!

#61 Aussie Roy on 05.18.13 at 4:33 am

Who’s this crap aimed at? Right. Impressionable, unsophisticated financial illiterates.
…………………………………………………………………..

The Greaterfools, great name for a financial blog.

#62 BenF on 05.18.13 at 4:43 am

Garth – this has all happened already in the UK. Newspapers are twice as thick on “property day”. The are their bulk advertisers. When they call the editor listens.

Please look into what else has occurred in the UK. Here is the main one to learn:

When volumes fall only more expensive properties sell, so rather than prices falling when demand collapses, you see the average property price rise a bit. This can continue for some time.

I’m not saying the above will certainly occur in Canada, but it may well in the larger cities. A counterexample is Northern Ireland and the North of England, where prices fell 30% or more.

Great blog. Moving to Montreal soon and looking forward to relieving some overleveraged “investor” of their burden for a song.

#63 benchwarmers on 05.18.13 at 5:07 am

With returns like that, screw the balanced portfolio Garth,
start buying one bedroom condos!

#64 David W on 05.18.13 at 6:03 am

Garth, what’s this about rents going up?

#65 James on 05.18.13 at 6:31 am

“First, nobody lives in a one-bedroom condo in suburbia for a quarter century. It is medically impossible.”

You, Garth, are too far from ordinary Canadian folks, they actually do. Not counting moves from one 1b to another 1b.

half of lover mainland are 40+ y old playwood lowraisez

#66 Asse on 05.18.13 at 6:36 am

Hey Tommy, at the time u were posting I was in bed with the woman I love……what were you doing? Life’s good, it’s a long weekend and the munchkins will be up soon. I will enjoy it. Will you?
I refuse to believe family would do that, maybe in your case it’s the norm.
The truth will set you free my friend, try living it, even if it is a fat, bald, limp, painful and penury existence. Good to have a computer, huh? Well, try anyway. Good to be wealthy, remember?

#67 Squatter on 05.18.13 at 6:40 am

“Seriously. It’s right there in the paper. Must be true.”

And seriously… It’s been endorsed by RBC. Must be true! The bankers are our best advisors for personal finance matters!

I’m running to buy a condo right now!

#68 FutureExpatriate on 05.18.13 at 7:11 am

Can they be sued? I smell a class action suit in there somewhere.

#69 bigrider on 05.18.13 at 7:23 am

These mathematical calculations done by RBC in the TorontoStar were done 30 + years ago in espresso shops/ bakeries all over St Clair and then carried up to Woodbridge in the eighties and ninties.

It is religion in those places among these people…LOL

#70 economictsunami on 05.18.13 at 8:27 am

Many commercials during the playoffs aimed at accelerating paying off your mortgage. (Higher interest rate debt be damned I guess.)

The government, regulators and the banks all are saying they are not worried about a housing crash in Canada and appear to be singing from the same song sheet.

“Soft Landing” is what you say in order not to spook the passengers.

For not being “worried” of a crash, they sure talking about it a lot…

#71 jamesM on 05.18.13 at 9:12 am

Nice how they include first and last AND 12 months of rent in their calculations.

#72 Josh in Calgary on 05.18.13 at 9:25 am

These sorts of pro buy arguments all forget to mention 2 things. Risk and maintenance. Risk that the price could decrease or at least stay flat (as Garth has mentioned at length), but there is also the risk of a special assessment where by the owners are required to cut a big fat check for leaky siding (same sort of risk applies to a SFH). They also have to compare the numbers over 25 years to make it look close. But what they forget to tell you is that most houses require 1 to 2 % in maintenance per year. Not to mention updating the stainless and granite from time to time. If you think you might move in the next 5 years, then it’s a terrible investment to buy. I own a house, but I’m well aware of the risks and costs and have no false impressions that this place is making me money.

#73 Dr. Wayne on 05.18.13 at 9:31 am

4 shanks on 05.17.13 at 9:14 pm

Can it be? Did I type fast enough?
AM I FIRST?!?!?!!!

===================

No … but you are definitely a moron …

#74 gooongo on 05.18.13 at 9:31 am

@42 Carpicker

http://i39.tinypic.com/n9vrm.jpg

Nice link.

#75 Ronaldo on 05.18.13 at 10:35 am

#56 Dean Mason –

”Condo fees paid for owners of properties are like annual management expense ratios paid for owning mutual funds.It sucks big time.”

Totally agree Dean, and one of the biggest drawbacks to buying these things. And one of the main reasons that retiring boomers will not be getting into them. Not in a big way. At least not the ones I hang out with anyway. So if Mr. Rennie thinks that there is going to be a rush of boomers to buy these condos, he has another thought coming. Not going to happen.

#76 Asse on 05.18.13 at 10:35 am

Ford, apparently smokes crack(really, a poor man’s drug-go for the good stuff buddy you can afford it), calls everyone with truth a liar. Oh well, works for him, I guess.
Brazeau, beaten up by a lightweight then beats up his partner? No money sense either.
Wallin, Duffy no longer conservative. Guess that makes them better people, or at least more fiscally responsible.
Endless stories of American republican gop acting badly–couldn’t make the stories up. Not that there’s anything wrong with that!

‘Al’, do you think the liberals making Canada a morally corupt country was a little off base, or are those acts acceptable? Wonder what you’ve done in your life;) By the way ‘panhead’, you look much healthier these days.

Good thing Garth stands up for the little folk.

#77 IvanDrago on 05.18.13 at 10:54 am

Wow! This takes the cake…our media has now hit National Enquirer levels of BS and LIES. I can’t believe what I just read!!!!

How can OSFI let RBC do this? This ad has outright LIES and PURPOSELY MISLEADS readers . They are trying to dupe young people into buying inflated real estate in Canada. OSFI needs to do something about how banks advertise. The big 5 banks , especially RBC, are the reason this country is in a real estate bubble about to crash down on the whole economy.

#78 thiscountryis going down the toilet on 05.18.13 at 11:10 am

Hey….who didn’t know the media was whoring for the real estate pimps? Only an idiot believes anything they read in a Canadian newspaper…..there never was honest journalism in Canada’s rigidly controlled propaganda pipeline…..and your politicians like it that way. Why do you think there are no teeth in the consumer protection law?

On the upside Torstar TS.b pays a nice 8.95% dividend. Even as an advertising rag it makes money……getting rid of those idiot ‘journalists’ and editorial crap was the best thing they did for a shareholder like myself. You just have to understand that the ‘news’ is BS…..don’t take it so seriously.

You want honest journalism you go to the Guardian or the Wall Street Journal .

#79 Ronaldo on 05.18.13 at 11:12 am

Congratulations Smoking Man

https://www.facebook.com/pages/I-gave-up-smoking-drinking-and-sex-It-was-the-worst-15-minutes-of-my-life/127001187322520

#80 Shankar on 05.18.13 at 11:14 am

You Canadians are very ignorant. You actually believe that an affluent fat person uses crack.

Affluent people use snort lines of coke. Crack is for poor people.

And how many fat crack users are there ?

#81 Tom Vu on 05.18.13 at 11:19 am

Rob Ford come from good “Ford” pedigree..

Henry, Glenn , Gerald and cousin Model T

#82 Tom Vu on 05.18.13 at 11:21 am

#66 Asse on 05.18.13 at 6:36 am

Hey Tommy, at the time u were posting I was in bed with the woman I love…

===================================

Better run…your wife found out !

#83 Turtle on 05.18.13 at 11:24 am

There is one point in an argument “renting vs buying” that people (on a buying side) are always missing: Earning power of downpayment. Great percent of people with downpayment (on a buying side) keep this chunk of money in cash and truly believe that this is the only way to save the downpayment.

Garth, could you please reinforce this point in your next posts one more time, so people get a better idea what is money, what is investment, what is earning power.

This whole topic “renting vs buying” should not be about money, as renting ALWAYS wins this money game. it should be more about sense of freedom. Do you feel that you have more freedom owning a house free and clear but working for paycheck, OR owning an income producing machine without need of paycheck but living under a landlord?

It is about freedom, not about money.

#84 Frustrated on 05.18.13 at 11:32 am

I understand this math, but I’m curious how are single people ever supposed to get into the market if not a condo? Places like Peterborough, where I could afford a house, have unemployment rates of 10%. I’m not interested in an 1.5 hour commute to work. Rent for life? If you’re renting for $1000-$1200 a month on the outskirts of the city, you have mice, cockroaches, plumbing issues, and good luck getting the landlord to fix any of it. The realities or renting are harsh – but I guess it’s better then ending up cash strapped by all the negative things I’m reading about condo ownership. It’s depressing.

#85 TurnerNation on 05.18.13 at 11:45 am

#139 Canadian Watchdog on 05.17.13 at 1:24 pm

Great post. Is that you? You didn’t mention gold.

To be really fancy measure the premium and spread for each “back month” of those forward contracts’ issuance. Vis a vis the cost of carry and expected future value of money.
If rates rising is feared then the back months should experience a decrease in their value.
People might wake up in 2015 with a pile of house on their lawn worth less than spot.

#86 TurnerNation on 05.18.13 at 11:46 am

I think it is Star 3, Ford 0.

There’s a good book, written by a Michael Moore-ish author, exposing corrupted small city fifedoms (Mayors backed by a few business elite who run the show) and their brainwashed worker bees in USA.

Of course it’s different up here?!

http://www.amazon.com/Deer-Hunting-Jesus-Dispatches-Americas/dp/030733936X/ref=sr_1_1?
Deer Hunting with Jesus: Dispatches from America’s Class War

“After thirty years spent scratching together a middle-class life out of a “dirt-poor” childhood, Joe Bageant moved back to his hometown of Winchester, Virginia, where he realized that his family and neighbors were the very people who carried George W. Bush to victory. That was ironic, because Winchester, like countless American small towns, is fast becoming the bedrock of a permanent underclass. Two in five of the people in his old neighborhood do not have high school diplomas. Nearly everyone over fifty has serious health problems, and many have no health care. Credit ratings are low or nonexistent, and alcohol, overeating, and Jesus are the preferred avenues of escape.”

#87 VanPerfecto on 05.18.13 at 12:03 pm

Rennie says boomers will drive market

He also carried on with a theme he began last year, explaining how baby boomers in Vancouver are driving real-estate development.

A surge of seniors is coming who are sitting on $88-billion in home equity that they’re going to cash in to help their children buy property and to pay for their health care.

Those people want to stay in their neighbourhoods when they downsize.

“It doesn’t how matter how wealthy they are, they’re looking to age in place in their community,” Mr. Rennie said.

That means builders need to be aware that they are building for two groups: the seniors buying down, and their children buying for the first time or buying up. But since the parents are helping out financially, they’ll have a say in what their children buy.

#88 Toronto Star on 05.18.13 at 12:09 pm

Our next headline:

” Headless man found in Topless Bar ”

We are on the quest for truth…scouring Loch Ness monster…the Himalaya Yeti, Brad Lambs bat cave….Bob Rennie’s flying saucer…

#89 Julia on 05.18.13 at 12:47 pm

Oddly I’m finding myself getting my news more and more from Aljazeera as a credible and interesting news source.

http://www.aljazeera.com/programmes/countingthecost/2013/05/2013518109537973.html?utm_content=rssautomatic&utm_campaign=twitter&utm_source=SocialFlow&utm_term=june&utm_medium=tweet

#90 waiting on 05.18.13 at 12:53 pm

the RBC ad is a nauseating piece of sexist crap.
The “winner buyer” is a guy, eyes wide open, triumphantly making his point, and the “loser renter” is a woman, eyes shut tight, hands in defense mode like “I don’t want to hear any more”. ugghh …

#91 Djb on 05.18.13 at 12:54 pm

The reason RBC needs to break it down on an Infograph is because Gen Y is really naive when it comes to finances and RBC knows it.

#92 Weekend Links – Happy Victoria Day! on 05.18.13 at 12:58 pm

[...] Check out Garth’s post “Star 3, truth 0.” There has ALWAYS been a bias between buying and renting, and he tears apart how RBC used an [...]

#93 Martin Lazi on 05.18.13 at 1:02 pm

#69bigrider on 05.18.13 at 7:23 am

Good one !!! made me laugh

#94 Ogopogo on 05.18.13 at 1:03 pm

I propose that Garth be nominated for the Order of Canada. Seriously, this is one of my favourite posts of all time. I grew up with my working-class dad extolling the virtues of The Star. So it’s with a mixture of rage and disgust that I see what’s become of it. Susan Pigg and her ilk have destroyed that paper. Mind you, I’m a long time G & M subscriber, and Garth’s exposé has confirmed my decision. Not that the G & M is any less enslaved to ad revenue, but at least they have Rob Carrick.

I’ll be linking today’s post to all my Toronto peeps.

#95 DON on 05.18.13 at 1:18 pm

When the banks start advertising in the local paper, that is a sign things have gone sideways.

If all was good they wouldn’t need to advertise and would not. The M$M is treading water as they move to the National Inquirer status. I no longer read or listen to any of them.

But then again while navigating through life it is always good to know what the delusional think…good way to make money off them.

Sheep dog most of the time, but soon to be wolf.

#96 Jon B on 05.18.13 at 1:32 pm

Enjoyed your critique of this piece of journalism. Integrity is very hard to find these days among corporations.

#97 Smoking Man on 05.18.13 at 1:33 pm

Wow really go to quit this binge drinking, I just woke up, broken toe,

No recollection,

As far as the Toronto Star….

Might as well put a top less woman on page 3 it’s not a news paper anymore,

How can anyone take it seriously…

#98 Grantmi on 05.18.13 at 1:37 pm

Why Michael Campbell on CKNW (little brother of Disgraced ex-BC Premier Gordan Campbell) still has Ozzie Jerkoff on his show ..

continuing to spout that everything is good… real estate is fine… rates are going to stay down FOREVER… don’t worry about it.. blahh blahhh, blahh… is beyond me!!

#99 jess on 05.18.13 at 1:42 pm

retro/ intro /extro /spect

February 18, 2010.

http://www.theatlantic.com/politics/archive/2013/05/remember-when-andrew-joseph-stack-flew-a-plane-into-a-texas-irs-building/275887/

how about working at the irs and the threats the employees get regularly
http://www.statesman.com/news/news/local/threats-contempt-come-with-job-for-irs-workers/nRqw3/

#100 FutureExpatriate on 05.18.13 at 2:13 pm

#78 Wall Street Journal as truth in journalism!?!?!?

ROFLMFAO!!!!!!!!!!!!!!!

I wouldn’t trust a Murdoch whore farther than my toilet.

WSJ opinion page: “Everything’s going to sh*t until a Republican is elected President.”

Now that’s some real Big Biz whoring. And 100% opposite everything Garth’s been saying from day one.

The WSJ used to be a bastion of independent journalism. No more.

#101 Mr. Monday Night on 05.18.13 at 2:47 pm

#87VanPerfecto on 05.18.13 at 12:03 pm

“A surge of seniors is coming who are sitting on $88-billion in home equity that they’re going to cash in to help their children buy property and to pay for their health care.”

—————————————————————

…only if there’s $88 Billion worth of house-horny to pay for it. Otherwise, I predict massive disappointment for the seniors and their children, who will have to stay in the basement for awhile longer.

#102 Spiltbongwater on 05.18.13 at 2:53 pm

When you see Rob Ford at the pawn shop selling his tv, then you will know that he smokes crack.

I always said that hitting balls at the driving range is like smoking crack. The last rock is never as good as it should be.

#103 Kreditanstalt on 05.18.13 at 3:06 pm

They also fail to factor in the likelihood of losing your job, being put on part-time or of taxes and inflation eating your real income…or of rates rising to more market-realistic levels.

RISK. Something just around the corner for many, many so-far smug, fat and sassy Canadian consumers…

#104 Dr. Hoof - Hearted on 05.18.13 at 3:24 pm

#98 Grantmi on 05.18.13 at 1:37 pm

CKNW is a glorified infomercial, especially on the weekends.

=========================

#99 jess on 05.18.13 at 1:42 pm

The IRS , if you follow the trail, is simply the enforcement arm of the even bigger fraud, the Federal Reserve.

Some history review would show that countries like the US Gov’t , prior to the Fed, did not need income tax, and had sufficient revenue via tariffs, which inherently protected the domestic industries.

In essence All Wars are Bankers Wars….so once the Fed was created…the IRS is effectively the muscle to grease and finance the war machine…which is why the US is imploding.

#105 Asse on 05.18.13 at 3:58 pm

Tommy ~ Better run your wife found out’ is the funniest thing youve ever written. One and only.

#106 Texasboy on 05.18.13 at 4:03 pm

One hundred and first

#107 TurnerNation on 05.18.13 at 4:15 pm

Smoking man an economic question. At the Duke I saw a who struck me as a “professional” if you know what I mean. Left with prey in tow shortly afterwards. Would they generally visit a place like that? Maybe only after paydays?

#108 Canadian Watchdog on 05.18.13 at 4:53 pm

#85 TurnerNation

You didn’t mention gold.

GOFO rates are almost negative again. This implies a hard backwardation is taking form or that gold's bid for US dollars is being withdrawn. In 1999 when GOFO was sustained at a negative rate, gold fell 15%  then rose 25% within 6 months. Believe me, you're going to see moves in gold over the next few years that will knock your socks off.

BTW, Canada sold some of its gold reserves in February for the first time since 2003.

#109 Old Man on 05.18.13 at 4:56 pm

I am fed up with all these clowns and freaks who have become the Mayor of Toronto over so many years, so say what if. What if Mr. Garth Turner ran for office would he win the prize? I say yes, so might become his next challenge in life, and something for him to think about, as would be so much fun in older age to kick some ass.

#110 Asse on 05.18.13 at 5:26 pm

There is NO proof yet that Rob Ford smokes crack. There may never be. At best a questionable hypothetical video. Good luck Robbie!

#111 X on 05.18.13 at 5:28 pm

I also like how they work on the emotional of fear by adding ‘(not including rent increases)’, yet fail to mention any potential for increases in condo maintenance fees or property tax increases over the next 25 years.

The loss of earning potential on the downpayment $, as well as using generationally low rates for their example, makes the effort for the one sided ‘comparison’ quite funny really.

My guess is the creator of the ad is trying to sell a 1 bedroom condo in the burbs and thought they could slide that one in….lol.

Yes, the authors, banks, prey on financial morons. And there are alot of them out there. Heck, even half of the bank employees are financial morons. But what do you expect, they are compensated for increasing bank profits, and are taught their financial proactices by the banks.

RE prices are getting so high that even the most simple minded are guessing they may never be able to pay their mortgage back.

#112 Julia on 05.18.13 at 5:40 pm

#84 Frustrated on 05.18.13 at 11:32 am
I had all those “renter’s problems” as a house owner. Only difference was that they were my problems to fix. As a renter i may have to wait for the fix at times, but at least it costs me nothing. Plus I live close enough to work to walk so I save $130 a month in transit.

Not to mention no more worrying about flooding basement and leaking roof every time it rains… priceless!

#113 Tom Vu on 05.18.13 at 5:53 pm

Hoo Boy…

Everybody out putting in multiple bids !

#114 Dr. Hoof - Hearted on 05.18.13 at 6:33 pm

Former MAC Marketing sales manager disciplined by RECBC.

Was she working for (or with) MAC at the time?

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/05/former-mac-marketing-sales-manager.html

Ms. Matsumoto was the subject of a recent Real Estate Council of British Columbia (RECBC) disciplinary decision.

According to the RECBC, Sharon Tomoko Matsumoto – currently unlicensed – entered into a Consent Order with the Council that, while licensed as a representative with Multiple Realty Ltd., Vancouver, she committed professional misconduct within the meaning of section 35(1)(a) of the Real Estate Services Act in that she:

(a) contravened section 7(3)(a) of the Real Estate Services Act in that she was employed as a sales manager with, and provided real estate services in that capacity for, a developer, all of which real estate services were provided to the developer separate and apart from the brokerage; and
(b) contravened section 7(3)(b) of the Real Estate Services Act in that she accepted, independent of the brokerage, remuneration paid to her directly from the developer, in relation to the real estate services provided to the developer.

The RECBC ruled that she:
(a) be reprimanded;
(b) successfully complete the Real Estate Trading Services Remedial Education Course; and
(c) pay enforcement expenses to the Council in the amount of $1,250.00.

etc. etc.

#115 Tom Vu on 05.18.13 at 7:10 pm

#109 Old Man on 05.18.13 at 4:56 pm

I am fed up with all these clowns and freaks who have become the Mayor of Toronto over so many years, so say what if.

=====================

Sounds like a campaign speech…always room for one more…everybody pass “hat” (not gas !)

#116 cynically on 05.18.13 at 8:33 pm

#78 – come on now, the Guardian, yes, but the WSJ, no way! The latter is owned by Rupert Murdoch, now the biggest media controller in the world. Google his holdings-unbelievable. They include that paragon of truth and integrity, FOX Cable News, the right wingnuts’ beacon of truth and the NY POST, probably the worst large circulation newspaper anywhere. He buys good media outlets and turns them into his vehicles for his political leaning which obviously is the very far right, not being content to just show the conservative side of politics. He also has extensive entertainment holdings in movies and sports.

#117 AK on 05.18.13 at 9:48 pm

Wall Street bonuses, staff levels to rise in 2013 -consultant

By Thomson Reuters

NEW YORK, May 17 (Reuters) – Wall Street bonuses and staff levels are expected to rise this year as trading and dealmaking activity pick up, according to a closely watched report released on Friday by a compensation consulting firm.

Johnson Associates Inc predicts that senior bank executives will receive bonus increases of 5 percent to 15 percent, with investment bankers getting the biggest potential bonus increases of up to 20 percent.

The firm, headed by longtime industry pay consultant Alan Johnson, cited “signs of economic recovery in the United States and positive market momentum” in its report, but also noted that new regulations and a slowdown in Europe may weigh on bank profits and employee compensation.

Johnson Associates predicts that banks and other Wall Street firms will grow headcount by 5 percent to 10 percent this year. Cost-cutting initiatives in 2011 and 2012 helped support bank profits, as trading and dealmaking revenues were soft.

The firm predicts that advisory bankers will receive bonus increases of 5 percent to 15 percent, while underwriting bankers will receive bonus increases of 10 percent to 20 percent. The firm expects employees of equities and fixed-income trading divisions to receive bonus increases of 5 percent to 15 percent. Bonuses in other areas including prime brokerage, asset management, hedge funds and private equity are expected to rise in similar ranges.

Commercial banking and retail banking were the only areas Johnson Associates expects to have flat to 5 percent bonus increases.

#118 Keith in Calgary on 05.18.13 at 11:23 pm

I just sold all of my Brasilian government bonds which mature in JAN 2014. Been holding them, contributing annually, and rolling over the 10 % coupons since 2003.

Netted R$1.2567MM which is about $634,900 CAD yesterday………….

Did it by SAVING AND INVESTING THE DIFFERENCE BETWEEN RENTING AND BUYING over 10 years……..

F/U CREB AND CREA !!!!!

You won’t get any of it…..not a f_ _ king penny. Sorry about your Lexus lease payments.

Realtors are liars, cheats, thieves and conmen.

Gonna put 50 % in physical gold and silver (because we’re fu_ _ ed) and 25 % in physical cash. The rest will stay in 3 different currencies in 5-6 different banks outside of North America. And I still own my condo in Rio.

#119 Last call for Greater Fools to buy into the condo market on 05.18.13 at 11:50 pm

Go ahead fool buy a condo The Star and RBC say it’s so!

You just must trust Toronto’s Biggest News Paper and Canada’s Royal Bank ; )

Cheers!!!

#120 canadian on 05.18.13 at 11:53 pm

350,000 Hong Kong residents have Canadian citizenship . I guess they’ll all be retiring here with their free medicare in the future , the government will do anything to keep the real estate bubble inflating. 1 million for home isn’t a bad deal when free medicare for 20 or 30 years is included.Better get ready to get in line when you’re old folk’s.

#121 george on 05.19.13 at 12:11 am

These days, the dynamic of over-issued, mispriced finance is a global phenomenon – the U.S., Europe, Japan, China, Asia and the “developing” economies. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced.

Financial Euphoria

#122 richmond bc on 05.19.13 at 12:37 am

It is very apparent these days that the gap between the rich and poor have widened more than ever here in Canada as well as the rest of the world. The rich are getting richer, and the poor cannot even afford an education for the next generation to get out of poverty. Education is only obtainable for the upper class because the average middle and lower class are struggling to keep up with housing costs and grocery bills. I was on the verge of tears when I heard the Liberals won another election here in BC. They have been responsible for selling out our province’s housing, education, and medical system for the last 8 years. Congratulations that we have another 4 years of the same. Just enough time to ensure my kids will never be able to attend UBC, yet you can be sure that Clark will open up more opportunities for a kid from China. Christie will make sure that we educate Chinese kids so that they can go back to their homeland and prosper.

#123 Dean Mason on 05.19.13 at 12:52 am

I forgot to mention,the $60,000 condos sold in west end of Toronto are 900 square feet. The condo fees in 6 years with 4.00% annual increases is $70,203.40.

It’s $10,203.40 more than the price of the condo,YIKES!

#124 NJ on 05.19.13 at 1:10 am

@#40-Jess
You say that finance is taught in school yet I have had 4 kids take high school math , 2 in MB and 2 in AB, and only the lowest math includes any type of financial and not anything that would encourage them to stay out of debt.
Only the pure, pre Cal or applied math is sufficient for university so maybe this explains why the majority of well educated people spend every cent they make yet trades and laborers who make less know how to live on less and still save for retirement.

#125 bob on 05.19.13 at 1:55 am

Oh Garth, Thank you so much for sharing this. I’m quite upset for a number of reasons…

So my question to you and to readers is this — what should we do about it? Should we complain to
a) RBC?
b) The Star?
c) F?
d) other?

This is unethical at best.

#126 FutureExpatriate on 05.19.13 at 5:53 am

#110 – “….ties to [family values] conservatives”

Lock ‘im up!

#127 Asse on 05.19.13 at 7:09 am

Any comments I have made on this Site referring to fellow posters would have used their avatars or stage names. I have tried to be amusing but if I have failed and you take personal injustice at a post I APOLOGIZE. Nothing was meant to be personal. How could it? I don’t know who you are. There are no identifiers. None. I know I’ve felt maligned, but there was nothing referencing others than comments on this Site and a tale for amusement. Again, I’m sorry if anything I’ve written is misconstrued. I merely thought I was following an acceptable decorum which at times made me feel uncomfortable. My humble apologies.
Carry on my friends.

#128 AK on 05.19.13 at 7:18 am

#118 Keith in Calgary on 05.18.13 at 11:23 pm
“Gonna put 50 % in physical gold and silver (because we’re fu_ _ ed)”

——————————————————————–
I have been hearing this since 1980. Had I listened then, I would be broke today.

#129 maxx on 05.19.13 at 7:26 am

#103 Kreditanstalt on 05.18.13 at 3:06 pm

“They also fail to factor in the likelihood of losing your job, being put on part-time or of taxes and inflation eating your real income…or of rates rising to more market-realistic levels.

Yes.
Normalcy bias is also another huge risk affecting people. Signs of economic cancer are so in our faces, yet many keep on swallowing the comforting pabulum dispensed by MSM.

#130 Julia on 05.19.13 at 7:37 am

Toronto still drinking the kool aid?

http://www.getwhatyouwant.ca/has-the-toronto-real-estate-market-gone-mad

#131 Julia on 05.19.13 at 8:05 am

Does anyone collect stats or done research on condo fees? I’d be curious to know the average condo fee increase in Toronto yr over yr. i know they vary widely, but knowing the average fee increase could be compared to average rent increases.

#132 maxx on 05.19.13 at 8:06 am

#103 Kreditanstalt on 05.18.13 at 3:06 pm
“They also fail to factor in the likelihood of losing your job, being put on part-time or of taxes and inflation eating your real income…or of rates rising to more market-realistic levels.
Yes.
Normalcy bias is also another huge risk affecting people. Signs of economic cancer are so in our faces, yet many keep on swallowing the comforting pabulum dispensed by MSM.

#133 Squatter on 05.19.13 at 8:11 am

#125 bob

what should we do about it? Should we complain to
a) RBC?
b) The Star?
c) F?
d) other?
This is unethical at best.
****************************************
I’m not a lawyer but my nose tells me you can’t do anything about it. It’s unethical, but so are millions of other ads everywhere.
They don’t lie, but they are misleading. I think the whole marketing industry is unethical at best.

#134 AK on 05.19.13 at 8:25 am

A case of closing the barn door after the horse has bolted.

In May of 2012, Rogers was recommending to investors to load up on Gold and Silver. LMFAO…

Jim Rogers on Gold: Continues to Have a Long Overdue Correction

a href=”http://finance.yahoo.com/blogs/daily-ticker/jim-rogers-gold-continues-long-overdue-correction-152940657.html”> Commodities Guru Jim Rogers
LOL…

#135 Asse on 05.19.13 at 8:34 am

Wouldn’t it be amusing if it turned out that 35 of my acquaintances were on this board and I wasn’t aware. That they use stage names similar to their BBM accounts that I’m not involved with and have never seen. Indeed, if Garth felt a post was a personal attack or defamatory it would have been moderated? I’ve seen many ‘deleted’ posts, and in fact had one post, regarding Garth’s prophetizing that has dissappeared into the ether.
Maybe I’ve posted comments that have wrung true to individuals but again nothing was meant to be personal. I don’t see how because I don’t know who you are. Again my humble apologies my friends if anything I’ve posted has resulted in your being defaced, maligned, or in any way made uncomfortable. You see, everybody on this Site seems to be after the truth, however misguided, maligned, or downright defaced it may be.
Hope your long weekend turns out to be everything you wish it to be. Weathers been good and the munchkins have been busy. No open houses, indeed everyone seems to be at a cottage. Enjoy, I am.

#136 – Plato (429-347 BC) on 05.19.13 at 8:59 am

Strange times are these in which we live when old and young are taught in falsehood’s school.

And the one man who dares to tell the truth is called at once a lunatic and fool.

#137 Ian on 05.19.13 at 9:15 am

In the advertorial, why is the cost of utilities $0? I have only ever lived in one apartment where the rent was all-in, and that’s because it was an older house split into three units and they couldn’t meter each unit accurately. Every other place I’ve been paying for electricity, water, gas, heat and sometimes septic pumping on top of the rent.

#138 rosie "moving forward" on 05.19.13 at 9:42 am

You can’t go wrong owning a home. Says so in the papers. All this talk about bubbles is crap. Says so in the papers. See, http://business.financialpost.com/2013/05/18/what-drives-our-passion-to-own-a-home/?__lsa=7d6f-83f3

#139 Mike on 05.19.13 at 9:57 am

The renter didn’t have a downpayment?

Putting the $48k downpayment in the stock market and assuming an average return of 7%, at the end of 25 years, they’d have $275,000 in equity.

They’d have saved 270.8 days of their life commuting to and from work. (.5hr each way).

$240k is unrealistic unless you’re out of reach of transit. So be sure to add $500/mo for an inexpensive car vs. $150/mo for a transit pass. Put the $350/mo difference in savings in the stock market and you’ve now built $560,000 in equity.

…now have you seen the condo fees on a 25 year old building?

#140 Daisy Mae on 05.19.13 at 10:15 am

“This is why RBC whored the Star. It gets an ad that looks like it isn’t.”

******************

Trust me, it looks like what it is — an ad.

#141 blokexistentialist on 05.19.13 at 10:27 am

Well, well, well, WELL … Harper’s chief of staff resigns. So it’s now Senategate … hope this sacrificial lamb isn’t enough to stave off a full-scale inquiry.

#142 Gunboat denier on 05.19.13 at 10:48 am

122 Richmond – Send your kids to BCIT. They get real skills marketable worldwide.

#143 jess on 05.19.13 at 10:59 am

124 NJ
…teaching what is a need before a want. e.g too much stuff starts with parents.

http://www.cbc.ca/natureofthings/episode/surviving-the-teenage-brain.html

FRONTLINE reports on new neuroscience research indicating that teenagers brains are stlll developing, especially in the frontal cortex.

http://www.ted.com/talks/sarah_jayne_blakemore_the_mysterious_workings_of_the_adolescent_brain.html

#144 Asse on 05.19.13 at 10:59 am

Plato, beautiful quote. Circumstances around the quote not so good.
Cheers my friend

#145 Jim Lahey, Sunnyvale Trailer Park Supervisor on 05.19.13 at 11:13 am

For all those who are hoping for a real estate crash, melt, whatever you want to term it, read this and weep. It is the wonderful greenbelt that was put in place in 2005 surrounding the GTA.

“The Greenbelt is established around the Golden Horseshoe, which is one of the fastest growing urban areas in North America.[1] The population in the region increased from 6.5 to 7.7 million between 1991 and 2001.[3] The population increase put urban development pressure on areas surrounding the Greater Toronto and Hamilton. Between 1996 and 2001, the amount of farmland decreased by 7% in the GTA, and by 6% in Hamilton.[1] Population is still projected to increase to 11.5 million by 2031.”

What do you think is going to happen to real estate prices in Toronto when you have one of the world’s largest greenbelts surrounding the GTA and a population that is going to 11.5 million by 2031…

#146 Piccaso on 05.19.13 at 11:17 am

The nephew just flipped his reno in Fort Saskatchewan, Alberta. Took him 10 weeks to reno and sold it in 6 hrs for full price.. made 50G

#147 Mister Obvious on 05.19.13 at 11:32 am

#124 NJ

“…only the lowest math includes any type of financial and not anything that would encourage them to stay out of debt.”
———————————————-

The problem is not so much math as it is logic. These are closely related but certainly not the same.

In school, my math was less than stellar. I passed calculus at BCIT but there is no way you could say I was proficient. I understand perfectly well what calculus is and why its so important to society, but I leave the specific manipulations to people who possess those skills.

On the other hand, my logic was very strong. This allowed me to succeed in engineering because although we need only a few mathematically brilliant people, everyone expecting to function in a technical field must have robust logical skills.

Illogical thinking rather than weakness in mathematics accounts for most of the financial mess in which so many Canadians are now mired.

#148 thiscountryisgoing down the toilet on 05.19.13 at 11:34 am

Get in Get out, dump your kids and your elderly dependants on the Canadian taxpayer and pay income no taxes for the pleasure of having acheieved a ‘safe’ passport.

http://www.vancouversun.com/business/bc2035/Many+Hong+Kong+immigrants+return+Canada/8402665/story.html

Any wonder why this country is going down the toilet?

#149 CrowdedElevatorfartz on 05.19.13 at 12:22 pm

How can it be Rob Ford?
I’ve yet to see an obese crack addict.

#150 Herb on 05.19.13 at 12:25 pm

The silence from the “Conservative” peanut gallery is deafening. Guess they’re all concentrating on the economy.

#151 I love libraries on 05.19.13 at 12:46 pm

Invest in the most important asset of all, whats between our ears….we need that now more than ever

#152 Ronaldo on 05.19.13 at 12:49 pm

#108 Canadian Watchdog –

”BTW, Canada sold some of its gold reserves in February for the first time since 2003.”

Do you have the link to this? Given that Canada sold off most of its gold holdings of 652 tonnes (1980 figures) by 2002, the 3.4 tonnes that remains is totally insignificant. Even little Cyprus has 13.9 tonnes. What is the point you were trying to make regarding this sale. 3.4 tonnes would easily fit into the backseat of my car.

#153 Ronaldo on 05.19.13 at 1:06 pm

#142 – Gunboat Denier -” Send your kids to BCIT. They get real skills marketable worldwide.”

Absolutely right.

#154 Shawn on 05.19.13 at 1:18 pm

Illogical Investing Decisions

Mr. Obvious at 147 said:

Illogical thinking rather than weakness in mathematics accounts for most of the financial mess in which so many Canadians are now mired.

***************************************

It’s true. There is a lot of illogical thinking in investments.

Consider Pension Plans. They need to make say 7% or more on their money if the plans are to work.

When government bonds were returning 6 or 7% and corporate bonds were returning 8% years ago pension plans put about 40% of their assets into corporate bonds. Corporations at that time were making roughly 12% return on equity and 60% of the money went there with some expectation that equities would return about 12% over the long term.

Today 10 year government bonds will return precisely 1.9% if held to maturity, 30 year Canadian government bonds will return precisely 2.5% if held to maturity. And 30-year A-rated corporate bonds will return about 4% if held to maturity. And pension funds do hold to maturity in most cases.

Meanwhile corporate ROEs have generally INCREASED and are still at 12% or higher though one has to pay some premium to book value to buy them. Still, equities can reasonably expected to return about 7% and perhaps more over the long term.

In the face of massive declines in the KNOWN WITH CERTAINTY future returns from bonds and with expected returns from equities having declined more modestly, what did pension managers do?

Did they reduce the funds going to bonds? NO, they either kept it at the same 40% or some of them burned by equity crashes in 2001 and 2008 and with their minds polluted by flawed theories of asset liability matching have INCREASED The money invested in bonds.

Most Illogical! One cannot expect to achieve a 7% return or higher by directing huge percentages of the funds to bonds that OF A CERTAINTY will earn a weighted average of 3% or less.

Why this illogical behavior?

Partly because theories of asset allocation have not been updated to account for near-zero returns on fixed income.

Partly because no pension fund wants to do anything different than all the other pension funds. (As warren Buffett pointed out, lemmings as a species have a poor reputation, but no individual lemming has ever received bad press for following the crowd)

It is safe to fail by following the crowd. It is very dangerous to fail by not following the crowd.

There are vast institutional and even legal barriers to any pension board member actually acting logically and independently. Money must be “professionally” managed, meaning conventionally managed, meaning that one must legally follow the crowd no matter where it heads.

The same applies to financial advisors. Logic arguably suggests abandoning fixed income or at least the really low returns of bonds. But there is a vast institutional machine that insists that a large allocation to fixed income is always prudent. The machine developed when fixed income returns were vastly higher than today.

In summary, my view is that logic leads me to conclude that bonds suck and I won’t invest in them. That’s my thinking, but please apply your own logic and invest (or not) at your own risk.

#155 IvanDrago2 on 05.19.13 at 1:18 pm

#118… Yeah you’re a real genius Keith putting 50% of that money in Gold & Silver which is about to crash 50% this summer! Lol…. Im guessing your Brazilian bond cash out story is BS too ad only an idiot would put half his money in metals… .

#156 Old Man on 05.19.13 at 1:30 pm

#115 Tom Vu – I have worked with political campaigns since High School, and Toronto has no Mayor as things are in utter chaos. Now what is going to happen is the big question; he must resign; not because he is guilty or innocent, but rather has lost public confidence, and what an opportunity if certain things happen, as the public vote next time will take a new direction like a tidal wave.

Now if all explodes into chaos a new election can be mandated with an official posting of nomination and this could happen. The qualifications to run for Mayor are minor, and a one page form needs to be filled out with a fee of a few hundred bucks to run for Mayor. A potential candidate must use the internet and a following to organize a network with intelligence.

I see an easy win for someone, and would be a nice gig for a few years having some fun in life; making critical adjustments to Toronto; having a driver and a fat expense account; taking control over important matters; and hopefully making Toronto a better place to live for all.

#157 ZZZ on 05.19.13 at 2:01 pm

To #148, you and the article you cited are totally wrong and ignorant to the hardships Hong Kong immigrants face constantly

I saw the whole thing unfold in own eyes, because I was the only few ones if my entire high school class that stayed in Canada to develop my career. Depends on what field you are in, not everyone wants to go back to Hong Kong. Everyone in Hong Kong now has to work average 12 hours a day (unoffiically) without OT pay. If you are in banks and IT, you might need to work even longer hours. IT in Hong Kong doesn’t pay as well as here in Canada too, the only difference is much lower income tax.

That article also dismissed the previous contributions to the Canadian tax income and economy.

Remember what Richmond looked like during the early 90s? All farmlands and abandoned farmhouses.

When immigrants came, they came to buy houses and cars, they bring in all the money they earned from somewhere to spend in Canada. You can complain about we driving up house prices, but who are the ones that cashed in big profits? Not the immigrants… now the house market is going to crash, who is going to lose big money? The immigrants. So stop all the haterade and start recognize how Canada has improved much since the 90s immigration wave.

Many rich immigrants tried to establish business in Canada or moved their business to Canada or opened a new branch. However due to bureaucracy and lots of complaints from the mainstream people, those business were too ahead of their time and got to nowhere. The mainstream just shunned their business just because their business model or the products they sell are different. They see it as something that can challenge their mainstream entitled business model.

Many millionaires family I knew tried to stay in Canada, but after 3 years of losing big money trying to set up a business and getting discrimination on business restrictions and other business related policies. They started to panic because they realize they cannot just maintain their current living status at this rate. Therefore they all moved back to where they come from, where they still have their money making business.

The mainstream never accepted us the immigrants, I got punched in the face while playing american football in high school PE class. Complained to teacher, he said I must be playing american football the first time. It’s like that.

I tried to make friends with whites, but they never talk to me seriously, at least in high school… just oh yeah, really, bla bla bla until his other white friends walked by and they will just off with their friends pretend you were never existed. The whites are only interested in the females due to yellow fever.

After university graduation, I personally saw several dean’s list classmates cannot even found a decent job they should able to due to they don’t have family or relatives or mainstream friends to hook them up. I am talking about straight A students who even managed to get A in English courses. Not the typical above average immigrant student who excels in math and science but failing English class. So all the time they spent working their asses, they found out they got nothing return from Canada. You cannot blame them for going back to Hong Kong for career.

After a decade of struggle to find even decent job in Vancouver after graduation, I finally decided to move to Toronto and start again from entry level. At least I am now earning enough money to support myself here in Toronto but now the challenge is I will have to fight much harder to get my work recognized in the company and can only dream about getting promoted due to nepotism everywhere.

To sum it all up, if Canada wants immigrants to stay and help develop Canada, they need to be willing to accept new concepts, new business models, fight the overpowering unions, and open the market. Right now, immigrants from the developed world has no incentives to stay because their hands are tied up everywhere. It is just simple logic, if people found out they can have better life in their home country, they would go back after years of trying to break it into Canada.

#158 Old Man on 05.19.13 at 2:29 pm

#150 – Crowded – a man of over 300 lbs. cannot be on the booze for his outrageous behaviour, so one with knowledge and intelligence must look elsewhere. It is not an issue whether he is guilty or innocent, as all videos can be doctored, so lets not judge. The real issue at hand is the pattern of behaviour, as he has lost voter confidence in the City of Toronto, and must resign if he respects the citizens, and saddle up and ride into the sunset. He is a clown in life, and wish him well, but must step down for the greater good of all.

#159 Ralph Cramdown on 05.19.13 at 2:35 pm

#155 Shawn

Good analysis regarding bonds, and I agree. There is one alternative possibility, however. If deflation were to spread from commodities to hard assets and equities, bond investors would look like geniuses, as would those parked in cash. I’m discounting this because I’ve faith that central banks won’t screw that up, but it is a possibility.

#160 Fzzzz on 05.19.13 at 2:43 pm

Who cares about finances and the economy?

Its a really nice day outside!

Lets go for a ride!

#161 Dr. Hoof - Hearted on 05.19.13 at 2:58 pm

#157 Old Man on 05.19.13 at 1:30 pm

===========================

The whole process is quite pathetic.

Everybody should volunteer in a campaign ( I have )…to see how it works.

Nothing will change until the people at grassroots rise up.

Yes, there are some good people who try…but they either get kicked out or absorbed by the system.

H.L. Mencken quotes

A good politician is quite as unthinkable as an honest burglar.

A politician is an animal which can sit on a fence and yet keep both ears to the ground.

Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule–and both commonly succeed, and are right… The United States has never developed an aristocracy really disinterested or an intelligentsia really intelligent. Its history is simply a record of vacillations between two gangs of frauds.

Democracy is the art of running the circus from the monkey cage.

Democracy is also a form of worship. It is the worship of Jackals by Jackasses.

#162 Dr. Hoof - Hearted on 05.19.13 at 3:22 pm

#158 ZZZ on 05.19.13 at 2:01 pm

Well, I am going to a cultural marxism fest this week…aka a seminar on Immigration.

I anticipate a koombaya fest, but I am going to let it rip.

Its been a disaster, especially in Richmond. Even Asians see the Metro Vancouver as becoming a resort city.

I’m not blaming the immigrants per se…but our Gov’t and their policies, who must have foreseen what is unfolding.

In the end…only a few have benefitted from this unfolding mess.

Education? all these suckers that swallowed the various “shades of degrees” kool aid accomplished was to absorb several years of BS in a suspension of reality so they wouldn’t keep an eye on the ball.

#163 FutureExpatriate on 05.19.13 at 4:01 pm

#150 – Crack addicts don’t start out concentration camp thin. It takes a year or two to get there.

#164 Stickler on 05.19.13 at 4:15 pm

@ #153 Ronaldo on 05.19.13 at 12:49 pm

“3.4 tonnes [of gold] would easily fit into the backseat of my car.”

Your car can hold 3.4 Tonnes! must be a bullshitagini. I hear they are fast! How’s the gas mileage?

#165 Old Man on 05.19.13 at 4:18 pm

#162 Dr. Hoof – Hearted – actually the world of politics is a game of power, and was a lot of fun, as went all in, and rose to higher levels with respect for many years. I managed campaigns to win, and the after parties were out of this world, as met some young girls and that was my reward. Naw, that was just a bonus on the side; the real bonus in politics was opening doors with a phone call to better my position in life with favours rendered. Politics is all about paying your dues with hard work, and the rewards will come your way with a request for a favour, and such will not be denied.

#166 Stickler on 05.19.13 at 4:23 pm

@#155 Shawn on 05.19.13 at 1:18 pm

Can you ever post something without mentioning Warren Buffet?

You remind me of that guy, you know…the one that has an unhealthy obsession with Warren Buffet….what is his name…?

Shane?
No, Steve…?, No…

Can’t seem to think of it at the moment.

#167 Rob Ford on 05.19.13 at 4:37 pm

Warren Buffet?

Mmmmm. That makes me feel h-u-n-g-r-y

#168 Dr. Hoof-Hearted on 05.19.13 at 4:40 pm

#165 Stickler on 05.19.13 at 4:15 pm

@ #153 Ronaldo on 05.19.13 at 12:49 pm

“3.4 tonnes [of gold] would easily fit into the backseat of my car.”

Your car can hold 3.4 Tonnes! must be a bullshitagini. I hear they are fast! How’s the gas mileage?

=================================

Fit implies volume….not the ability to transport.

#169 Dr. Hoof-Hearted on 05.19.13 at 4:42 pm

#166 Old Man on 05.19.13 at 4:18 pm

Yeah I know……its the old boys network.

There is networking…then there is Freemason soap drop.

#170 Stickler on 05.19.13 at 4:50 pm

@ #158 ZZZ on 05.19.13 at 2:01 pm

Amazing. Canada is maybe the only country where BOTH the new immigrants AND the long standing multi-gen citizens complain that they are not being treated fairly.

Sorry for your struggle, I know LOTS of white multi generational Canadian citizens that have had very hard times in Canada. Many not able to participate in opportunities because of affirmative action.

1 example (of many I could state) is a new university grad (white, male) applying to a Canada wide recruiting program for finance related jobs (for new university grads)…no interview, sorry.

Well, ok maybe they were not good enough on paper, right? This person got a hold of (via debauchery) the list of names to be interviewed. 100% of the candidates were of a certain ethnic background (not white, or English sounding)…some coincidence huh?

Most of the eager people (of all nationalities) I know of left Canada & did or are doing quite well.

#171 Stickler on 05.19.13 at 4:59 pm

#169 Dr. Hoof-Hearted on 05.19.13 at 4:40 pm

#165 Stickler on 05.19.13 at 4:15 pm

@ #153 Ronaldo on 05.19.13 at 12:49 pm

“3.4 tonnes [of gold] would easily fit into the backseat of my car.”

Your car can hold 3.4 Tonnes! must be a bullshitagini. I hear they are fast! How’s the gas mileage?

=================================

Fit implies volume….not the ability to transport.

————————————-
>>> I understand, but 3.4 tonnes of anything is not that much. I think the point got lost.

http://demonocracy.info/infographics/world/gold/gold.html

…Shows gold visualized in gold bars

#172 Old Man on 05.19.13 at 5:07 pm

#170 – Dr. Hoof-Hearted – I have no idea about this conspiracy stuff, but have a ring on my ringer with a 32, and looks like I belong to the Scottish Rite, but must have picked this ring on sale at a flee market, as it looks good. :)

#173 Ronaldo on 05.19.13 at 5:26 pm

#169 Hoof Hearted –

”Fit implies volume….not the ability to transport.”

Thanks for clarifying that Hoof. Some just miss the point.

#174 canadian on 05.19.13 at 5:27 pm

#158 ZZZ ,everything you write is contradicted in the article such as,working more hours in H.K. , making less money etc. You act like you’re doing Canada a favour , just make sure you don’t spunge off us in retirement.Thank you and don’t do Canada any more favours, we got along quite well before you showed up.

#175 ZZZ on 05.19.13 at 6:25 pm

#175 I don’t blame you for not believing me. Please read the following more credible material on Hong Kong work hours. The article only cited one extreme example to simply fan the hatred towards Hong Kong immigrants.

http://hudson.hk/AboutUs/NewsRoom/PressReleaseHudsonReportHKOct2012

From wiki: http://en.wikipedia.org/wiki/Working_time

Hong Kong [edit]
Till now, Hong Kong has no legislations regarding maximum and normal working hours. The average weekly working hours of full-time employees in Hong Kong is 49 hours.[49] According to the Price and Earnings Report 2012 conducted by UBS, while the global and regional average were 1,915 and 2,154 hours per year respectively, the average working hours in Hong Kong is 2,296 hours per year, which ranked the fifth longest yearly working hours among 72 countries under study.[50] In addition, from the survey conducted by the Public Opinion Study Group of the University of Hong Kong, 79% of the respondents agree that the problem of overtime work in Hong Kong is “severe”, and 65% of the respondents support the legislation on the maximum working hours.[51] In Hong Kong, 70% of surveyed do not receive any overtime remuneration.[52] These show that people in Hong Kong concerns the working time issues. As Hong Kong implemented the minimum wage law in May 2011, the Chief Executive, Donald Tsang, of the Special Administrative Region pledged that the government will standardize working hours in Hong Kong.[53]
On 26 November 2012, the Labour Department of the HKSAR released the “Report of the policy study on standard working hours”. The report covers three major areas, including: (1) the regimes and experience of other places in regulating working hours, (2)latest working time situations of employees in different sectors, and (3) estimation of the possible impact of introducing standard working hour in Hong Kong.[54] Under the selected parameters, from most loosen to most stringent, the estimated increase in labour cost vary from 1.1 billion to 55 billion HKD, and affect 957,100 (36.7% of total employees)to 2,378,900 (91.1%of total) employees.[49]

#176 Quebec is Great on 05.19.13 at 8:07 pm

Pull your accounts from RBC. Considering many people on this blog claim to be of significant worth, pulling your $$$ out of RBC with an explanation why should help steer them toward a more ethical path…

#177 Murray F on 05.20.13 at 10:37 am

The first line of my comment I just sent had a typo
It should say

I’m not sure I can totally agree with you. I own a condo in Victoria and rent it out.

And NOT
I won a condo in Victoria

Sorry,
Murray

Instead of a mortgage I have a line of credit loan against the condo, so I can pay as little as just the interest, or as much of the interest and principle as I wish.
I receive $1650 per month in rent.
My line of credit loan costs an average of $750 per month.
Taxes are $215.54 per month
Condo fees are $269.81 per month
Insurance and misc are $20 per month
This leaves a profit of $394.65 per month
If I choose to pay down the line of credit loan, it would reduce my monthly interest costs accordingly (to the tune of over $14,000 over the last 3 years that I’ve had the property). I don’t do that and maybe I should, but I want to keep my line of credit loan at the same level because I can reduce my taxes by the full amount.
Now, I’m not saying renting out a property is good for everyone, especially if you don’t want the hassle of being a landlord, but by comparison, if you’re young and can afford to wait until your property appreciates enough to make a decent profit over time, I believe it’s much better to own than to rent. If you are older, or more transient, then yes, renting is better because you it does take time for you to get your money back from owning a property, especially during a downturn in property values as we seem to be in now.

Over the past many, many years there seems to be a cycle of about seven to eight years where no matter when you buy a property, it will have increased in value within 7 years and you should be able to make a decent profit AND the investment you made will have paid off.

#178 The Glue on 05.21.13 at 1:43 am

$750 for moving costs?

#179 World Traveller on 05.21.13 at 2:41 pm

The Star needs all the help they can get, their website has become a complete dogs breakfast, and the Wheels section? Don’t get me started….

#180 Sue on 05.21.13 at 2:49 pm

Looks like RBC is spinning the facts to entice people into home ownership, but lost earning power of 60,000 (7%)? I think that’s a bit of spin as well. I will be facing the buy/rent decision shortly – if I knew of an investment where I could get 7% return I would rent, for sure! Please tell me how I can get 7%.