The shill

geezer

I’ve done a little shopping this week, my contribution to deep research. The tour included seven houses, all listed in the normal zone for SFHs in decent areas of Toronto – between $1 million and $1.8 million. All have been on the market since at least June. One’s been seeking a buyer for six months. And one’s been for sale for a year.

Price? All have been reduced by at least $100,000, and three more substantially. If buyers don’t materialize by Thanksgiving, the sellers may seriously chop, or give up and try again in the spring.

This is not the market the realtors tell you exists – with sales and prices romping higher. Just a few days ago local cartel boss Dianne Usher said this: “The strong annual sales growth experienced in July was sustained in the first two weeks of August.  The fact that sales were up for all major home types in the City of Toronto and surrounding regions suggests that a wide range of buyers are active in the marketplace today – from first-time buyers through to existing home owners whose housing needs have changed.”

About the same time, the region’s builders announced that while new house prices have never been higher, in the past ten years sales have never been lower. New condo projects are down 70%.

Warns the head guy, Bryan Tuckey: “It’s important to understand that while we are experiencing record-high construction, these homes have been sold two to three years ago and are not an accurate representation of today’s new homes market. Sales activity in 2013 has been low and we will start to see the effect of that in two to three years.”

This is the reality of the marketplace. So are fat five-year mortgage rates. We’re now a society where a majority of people can’t save $10,000. The economy has largely stalled. And gas prices are set to explode, thanks to a new war.

But wait, there’s more. On Wednesday came a fresh study (BMO) reminding us how screwed the Boomers are (stop applauding). The bank figures if a couple wants an income of $54,000 (the average amount spent by current wrinklies) they should have about $1.3 million saved. But this is double what most people think they’ll need ($658,000). Worse, the average amount saved by folks nearing retirement is only $228,000 – which means they’re $400,000 short of half the amount they actually require.

Seven years ago 20% of near-retirees worried they were in trouble. Now 46% say they’re not ready for retirement. Ya think? And those seven years brought record-low borrowing costs and real estate inflation. Sha-na-na-na-na, live for today…

So how will they possibly survive? First, an amazing 71% say they’ll get a job after they retire, which makes you wonder what they think ‘retirement’ is. Second, fully a third say they’ll be punting the house to make ends meet. Of course they will. About three-quarters of Boomers have houses, while almost an equal number have no pensions. Now imagine the impact of three million more listings over the next few years on a housing market which will face higher borrowing costs and a residue of record debt. Who, exactly, will be Hoovering up those properties?

Connect the dots and you can see how seriously whacked most people’s finances are. GenXers and their kids have no money because they’ve all got mortgages. Boomers have saved a fraction of what they’ll need, because their net worth is locked in real estate. House sales can drop, but prices don’t – because the sellers need every cent. But eventually the dam breaks, and valuations drop. Anyone professing otherwise is shilling.

Like the North Shore Credit Union, for example, which has launched a new campaign aimed at getting those copter parents to hand over condo downpayments to their kids, co-sign the mortgages, and hope for the best. What a great idea! Suck off the inadequate savings of the old to create life-long indenture for the young. Faustus would be so proud.

This sign appeared in North Van days ago:

egg1

This brings me to a bizarre report released hours ago by the Conference Board. You just know we’re in trouble when a right-leaning think tank writes a pro-condo report for a company that insures high-risk mortgages, and the media reports it as news. No condo crash coming, it says: “A flood of foreclosures and subsequent sharp supply increases is simply not in the cards.” But who said it was? We can have a perfectly devastating 15% correction, and never near crash levels. And probably will.

But the best part? Boomers will rescue condos. “While regional markets clearly vary in strength, all will benefit from an expanding population and a rising share of condominium-loving empty-nesters aged 55 or more.”

You mean those savings-deprived, pensionless, planless people who may never retire and need to turn houses into income because you can’t eat drywall?

Yup, that sounds plausible.

Sometimes I think the swill we’re fed couldn’t be worse. And then I remember Brad Lamb.

More on that tomorrow.

154 comments ↓

#1 TO and GTA Sales and Stats 2013-08-28 on 08.28.13 at 8:53 pm

Increased activity in the more expensive areas of Toronto. This will skew the stats again.TO and GTA Stats and Sales 2013/08/28
GTACondos: http://bit.ly/185rCFX
905SFH: http://bit.ly/185rEO7
416SFH: http://bit.ly/185rCWt

#2 Donald Trump on 08.28.13 at 9:02 pm

Given I have several GFB gold medals for being first, I will give others a mulligan….except Dr [email protected]$$holeYNE

#3 vancouverite on 08.28.13 at 9:02 pm

Hmmm, should one worry? Naaa, flipping real estate to one another will save the day :(

B.C. wages drop further behind the rest of Canada

http://www.vancouversun.com/business/bc2035/wages+drop+further+behind+rest+Canada/8845020/story.html

#4 Not impressed on 08.28.13 at 9:03 pm

Houses are moving like hotcakes in Markham. All of the 2000 sqft+ houses have gone 5-10% over asking price. One most was listed at $599,000 and sold for $672,500. How’s that for a slowing market? Also 5/10 year bond yeilds are down.

Poor Markham. — Garth

#5 guelphstudent on 08.28.13 at 9:03 pm

Where can I find this report by conference board? Anyone, so far 30 minutes in, and I can’t find it :(

#6 G on 08.28.13 at 9:08 pm

Hmmm….maybe boomers will save this condo project in St. Catharines.

Here’s the website:

http://portplacecondos.com/

Here’s an example of what is for sale – 1 Bedroom 715 sq ft for $375k (MLS H3103940):

http://www.realtor.ca/propertyDetails.aspx?propertyId=12878986&PidKey=1325606950

There’s only 40+ of them for sale.

….and here’s what is down the street. MLS N30022374, 3 bedroom home for $327k, 1950 sq ft.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13438382&PidKey=-1781269181

Geezer’s lining up for sure.

#7 visorman30 on 08.28.13 at 9:11 pm

I was hoping you would cover the bank of Canada statement: http://www.bankofcanada.ca/2013/08/publications/speeches/exits-spillovers-monetary-policy-independence/

No news there. Stimulus will end when economies permit. — Garth

#8 frank le skank on 08.28.13 at 9:21 pm

I don’t understand how the price of housing can be so elevated and only lose 15% of its value to normalize. That would be a little bump in the road for home owners after the gargantuan gains of the last decade. When you look at all the variables involved (boomer finance, minimal income gains, elevate home ownership rates, sluggish economy) I don’t see how 15% would be meaningful. If that’s the case for a city like Toronto and Vancouver, Harpo and Flaherty deserve some credit for minimizing the damage.

#9 Liquid on 08.28.13 at 9:23 pm

In the same BMO study that says most Canadian’s don’t have $10,000 saved it also mentions one quarter of us are living paycheque to paycheque :( Definitely some worrying statistics. I’m lucky enough to be currently employed when there are so many other young people out of work. Trying to save as much as I can now, because fiscal constraint needs to applied even when times are good to prepare for worse times ahead.

Some people like my high school teaching friend won’t likely need a $1.3 million savings portfolio because she has a defined benefit pension to look forward to. But for the rest of us, we just have to do our best. I’m aiming for $2 million in today’s dollars by the time I retire, just in case (^_-)

#10 Mike2 on 08.28.13 at 9:27 pm

This market stopped making any sense 5 years ago.

One of the most stunning things I’ve been watching in recent years are people who are moving out of the city because they can’t afford to own downtown and they’re worried about getting priced out of darkest Scarborough or Oshawa.

A good friend of mine gave up her beautiful, small, cheap downtown apartment within walking distance to work, for a $300k mortgage and an hour-long commute. I could only congratulate her and help fix her garage door.

Next door to my $1100/mo 4th floor apartment was a 1 bedroom basement condo facing a major street which recently sold for $360k. My garbage goes out next to their yard. It would be a bad buy at half the price. But it’s got ensuite laundry and hardwood floors.

I’m tempted to install granite countertops and hardwood floors in my rental. I think I’m going to be here a long time.

#11 Jimmy on 08.28.13 at 9:27 pm

Drudge Report is showing a link to the latest Top 10 Places to Live results. Usual Toronto, Vancouver, Calgary in the list.
Newcomers may keep the game going for quite some time.

#12 No on 08.28.13 at 9:28 pm

#2 trump

except you’re usually not first when you post”first”, which makes you all the more annoying.

#13 Smoking Man on 08.28.13 at 9:30 pm

What is the opposite of

Smoking men > Nemgnikoms

Obviously no dyslexics in the room yesterday

#14 Jan on 08.28.13 at 9:36 pm

What is it with you constantly disrespecting the elderly????????????/
Anyways, I am now convinced you will never win this real estate orgy war.

What disrespect? — Garth

#15 Dean Mason on 08.28.13 at 9:38 pm

Mark Carney, the U.K. interest rate manipulator said to U.K. consumers today spend more money.What he is saying is borrow money like it’s water but then you find out that the water(borrowed money) was not as clean as you thought(high debt).

You now regret drinking all that water(borrowed money) and are feeling sick and need medical attention(low interest rates). The problem is you can’t drink any clean water because you can’t afford it.You are now on your last legs( recession,slow economy,no jobs,low paying jobs,higher inflation,high consumer debt etc).

#16 Unplugged on 08.28.13 at 9:39 pm

Garth you MUST BE WRONG! Look at what the REALTORS are saying.. the recovery is already taking shape according to the most highly qualified individuals in the industry! Take this for example: http://www.youroklife.com/summerland-bounce-back-market-august-2013/

#17 TheCatFoodLady on 08.28.13 at 9:43 pm

Informal, ‘boots on the ground’ research is up my alley as well. My work/informal volunteer activities bring me into frequent contact with the elderly & I’m seeing the earliest signs of impending trouble play out.

Most are in their late 70s or early 80s. Many have recently lost spouses or as couples, have decided the suburban home is beyond their capabilities to maintain or interest to do so. And… while many do have pensions, they’re finding it’s not enough & selling the family pile eventually was always in the plans. One tiny problem – those already on the market are asking far too much & are taking it personally, “an insult!” when the few offers they get are well below asking. These may be reasonably well built, (by today’s standards), homes but most are due or close to due for major work. They’re anything but the open plan today’s families like. The decor is… let’s just say the decor is often beyond what potential buyers can look past.

Others NEED to sell their homes but don’t like what the more ethical realtors have told them in terms of what they can get. They’re going to hold off, use some credit & put their places on the market in the spring when the market gets over this ‘temporary slump’.

Others yet have sold – I’vce followed evolving discussions for more than a year. Sadly, plans to sell, realize the equity & rent a nice condo have changed. Now if they’re renting that nice condo, they’re sharing – not always with great results. Or they’re having to go far more downmarket than they’d anticipated.

And what really burns my britches, they’ve allowed [email protected] to convince them that the safest place for ALL their equity gains is in a nice safe GIC & of course because they’re long term, ‘special’, valued customers – they’ll give them a whole 1.75-2.0%

I’m of the lower orders – I clean for their more fortunate friends. Thus, they see fit to give me all sorts of financial advice. They know I wouldn’t touch GICs with a ten foot pole. They don’t understand why I’m chasing scary, probably mythical gains. Wouldn’t I prefer to see my money grow at a safe, predictable 2%? Just like their money is growing? They have their taxes done for them & obviously – not by anyone interested in the financial well being of their clients.

When I explain that at their marginal tax rate, (usually the highest; add surtax), they’re losing half, then more than the rest to inflation – why I can’t possibly know what I’m talking about!

Earlier today, I was being sneered at – how much had I lost in yesterday’s market debacle? Not a cent. “WHAT? But all the markets were down? How could you not lose?” Maybe because I didn’t sell a thing. In fact, I’m happily hunting bargains for purchase soon.

I understand their time horizon is considerably different from mine & I really get that. Most won’t be ‘harmed’ by the loss they’ll take keeping money in GICs – they were positioned all their lives to do well if they were careful. But when they brag about their kids & grandkids following their advice & sticking with GICs, I wince.

On another note – serious exterior & interior house fluffing going on – most in places I’m guessing will hit the market soon & some in houses that have languished on the market since early spring.

Don’t fluff – drop the price & try cutting the lawn.

#18 East Van on 08.28.13 at 9:44 pm

Oil Prices have risen from $32 in 2008 to $110 today.

$145 oil may have caused the Great Financial Crisis of 2007-2008.

Seatbelts please!

#19 Mel on 08.28.13 at 9:48 pm

I for one, will never accept the dance about “15% drop in housing”, or any other number that does not reflect reality.

Slow death, quick one, or somewhere in between. History always teach us that the higher the bubble, bigger the trouble. So, in my estimation, house prices will fall at least 50%, and would give it a 60-70% drop.

No, I am not over the hill in my assessment. History is telling me that. It is up to you to believe all those low ball estimates. In our case situation in Canada, it is all the way down.

As for any U.S. recovery, sorry, but that is too optimistic. Recession is here already. Just because stock market is running on Federal Reserve promises of more bond buying is NOT economy. It is only buying time for another crash. If only the word ” Taper” is giving stock market heartburn, you know we are living in a fantasy, not real economy.

Central Banks should stop now, and let’s see if Mr. Market index numbers will go higher. As for me, I know where it will go.

#20 John in Mtl on 08.28.13 at 9:49 pm

Why would it not work? Boomers are not screwed because of kids and immigration: an ever expanding population until the planet can no longer sustain us all – still many, many years away. Constant brainwashing will keep consumption and debt slavery going until it can’t. Humans seem to never learn; the same historical mistakes are endlessly repeated; booms and busts, rise and fall, its the normal cycle of things on planet Earth since eons.

Scenarios: Boomers sell to the kids or HAM-like new “citizens”. Kids buy boomer house, get mortgages because the bank *needs* to and *has to* make money any way they can. Kids become bank slaves but they are “proud owners”. Boomers get some cash for condo down payment and lifetime living expenses, but they are not ashamed of debt or dying with debt any more (its the new “normal”) so they buy condo, get mortgages again because the bank *needs* to and *has to* make money any way they can. Boomers die, bank reposesses & sells – even at a loss they still make lots of money. Or, Boomers die, kids inherit condo, rent it out or sell it to new generation coming up or immigrants. And so the wheel keeps turning!

It can’t go wrong – as long as there are more and more new arrivals to feed the system. And there will be – Humanity loves to make babies, the future consumers and slaves. Immigrants love to come West to try their hand at achieving “The american Dream”.

#21 William of the North on 08.28.13 at 9:52 pm

I predict that there will be a building boom in Syria; once the U.S (&Canada) have finished saving those poor civilians by dropping bombs on them.

I suppose it will be a ‘boom’ for their economy!

#22 Igor on 08.28.13 at 9:57 pm

# 4 Houses are moving like hotcakes in Markham.

Nope. This house in Markham is not moving for 3 months already, price has reduced by $50K.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13460039&PidKey=60036081

#23 Dan from Richmond Hill on 08.28.13 at 9:58 pm

We’re now a society where a majority of people can’t save $10,000.

Does that mean these people do not have TFSA, RRSP, RESP or any other investments?

#24 Stuck on an Island on 08.28.13 at 9:59 pm

A RE agent in Victoria today (one who is trust) said he didn’t think houses would go down anymore in Victoria and stay flat for the next 4 or 5 years.

Any comments?

#25 #4 you are so full of it! on 08.28.13 at 9:59 pm

Houses are moving like hotcakes in Markham. All of the 2000 sqft+ houses have gone 5-10% over asking price. One most was listed at $599,000 and sold for $672,500. How’s that for a slowing market? Also 5/10 year bond yeilds are down.

BS!
http://recharts.blogspot.ca/2013/08/905-sfh-sales-and-stats-2013-08-28.html

#26 Garth's Disciple on 08.28.13 at 10:04 pm

Agreed on the destroyed >$1.0m market….since the rules changed and no cmhc on >$1.0m house price, means buyer has to have minimum 20% plus closing costs (3% to 5% in GTA) = $250k in cash to buy $1.0m home…..don’t know many people with that kinda cash…do you? Last person I know in feb 2012 bot house for $1.25m with $40k down! Can’t do that anymore. So all the buyers who were gonna buy $1.0m+ houses with their $50k RRSPs are eliminated from the premium and now are converted to the $800k/$900k mkt and causing the last remaining bidding wars everyone is talking about…but another 100bps of mortgage rate increases over the next 6 months and all bidding wars will be a memory.
I rent in a high end neighbourhood in west end of Toronto and the crickets are chirping around the ‘for sale’ signs. Houses priced at $1.3m, which would have sold higher in bidding wars last year, now sit for 2 months and price cut $150k and finally pull the listing…I guess we’ll see many relist next week.
IT IS OVER!

#27 Obvious Truth on 08.28.13 at 10:05 pm

Hasn’t Van housing been in a downtrend for years?

Houses have always been for living in. Nothing else. They cost money. Never give you money. This will be the same for always. In the meantime……

Da Nile grows longer by the day.

#28 Realtor #1 on 08.28.13 at 10:06 pm

Prices will not reach 2009 levels. My condolences

#29 Smoking Man on 08.28.13 at 10:08 pm

#21 William of the North on 08.28.13 at 9:52 pm

Be carefully Willy, anon, after me destroying his nonsense yesterday has gone back to the community centre,

He and his fellow tribal members are doing shifts going back into the archives of GF looking for the goods on the the mad man who invented planet Zioscope,

Was going use Ziostan but hell my plant is called Zioscope.

After weeks of pulling every Smoking Man post the collective will discover that I have amazing powers of observation, call the future with such amazing accuracy, all the while being completely drunk and insane.

I and the universe is swrinking

Anon, go find a good Tugstres and have some fun.

Religion = slavery wake up

#30 Ted54 on 08.28.13 at 10:09 pm

The bank figures if a couple wants an income of $54,000 (the average amount spent by current wrinklies) they should have about $1.3 million saved.

Garth this is very general statement. A couple with CPP (max)self employed along with maxed TFSA in say REITS in 2018 plus income from small investment property will provide the same income of 50K to 60k a year.

What exactly is the bank suggesting. 1.3 million in savings is invested in and where? Sounds sketchie to me.
The cohort that will pick up the slack in over built condos in the next 5 years will be the boomers, absolutely no question about it. Why is so bad that construction has dropped like a stone in new condo projects. The bigger problem would be if despite the current over build they continue to ad to it. Vulch a little on downtown small condos over the next few years and watch your wealth grow

#31 Vamanos Pest on 08.28.13 at 10:13 pm

#14 Jan
I think baby boomers would be more offended by you calling them ‘elderly’ than anything Garth said. The oldest of baby boomers are 67.The youngest aren’t even 50. Agreed, it’s not young. But ELDERLY?, come on. All I know is that when I’m between the ages of 49 and 67, it might rub me the wrong way if you called me wrinkly, but you call me elderly, and that would outright piss me off.

I did not use the E-word. — Garth

#32 Patient in Richmond on 08.28.13 at 10:23 pm

was over in Victoria for 2 days . Grabbed a tea at the local mc donalds and ened up talking to guy guy that has a drywall firm in Victoria . He used to have 35 employees when construction was booming . He is down to 3 ..

apparently farmer construction has cancelled several condo towers in Victoria due to low demand.

and so it begins….

#33 Brian Ripley on 08.28.13 at 10:24 pm

I just published an August 2013 IMF study showing that among developed countries, Canada ranks #1 as being the most dependent on housing relative to GDP. Chart here: http://www.chpc.biz/2/post/2013/08/slave-to-housing.html

As the IMF points out “A rising construction share during the boom time means construction grows faster than GDP, and a sharp decline during the recession reverses the process.”

And you can see by my Canadian big metros chart that we are still in the early stage of the inevitable correction. Chart here: http://www.chpc.biz/canada_chart.html

#34 timmy on 08.28.13 at 10:26 pm

First of all 15% is not a devastating correction, given that prices have run up 100% since you started forecasting a drop in prices. Second, as a financial planner, you should call out the bullshit about needing over a million to retire, when this is simply not true for 80% of the population. Most couldn’t save that much if they tried, and most survive on far less, and the Canada pension and Old Age Pension need to be factored in.

House prices have increased 26%, on average, since this blog started. A 15% correction would indeed be a major event, especially for those with little equity. As for living on CPP and OAS, they were never intended to be more than a supplement. Nobody can live on those crumbs and say they are living well. — Garth

#35 Gg on 08.28.13 at 10:40 pm

No news there. Stimulus will end when economies permit. — Garth………
LoL. Exstending the time line again I see. Lol.

Actually that is what the BoC said, not me. — Garth

#36 Donald Trump on 08.28.13 at 10:41 pm

DELETED

#37 KJG on 08.28.13 at 10:46 pm

Where will all the extra money go after the US Federal Reserve substantially cuts back on its stimulus spending?

#38 45north on 08.28.13 at 10:51 pm

I’ve done a little shopping this week

yeah whatever the numbers the real estate people say, people notice when their house doesn’t sell

Mike2: A good friend of mine gave up her beautiful, small, cheap downtown apartment within walking distance to work, for a $300k mortgage and an hour-long commute.

your friend is like the duck in Peter and the Wolf:

The cat quickly climbs into a tree, but the duck, who has excitedly jumped out of the pond, is chased, overtaken and swallowed by the wolf.
http://en.wikipedia.org/wiki/Peter_and_the_Wolf

TheCatFoodLady: Others NEED to sell their homes but don’t like what the more ethical realtors have told them in terms of what they can get. They’re going to hold off, use some credit & put their places on the market in the spring when the market gets over this ‘temporary slump’.

you didn’t say that they will use some credit to fix up their places but I thought it. I don’t like their chances.

#39 Republic_of_Western_Canada on 08.28.13 at 11:05 pm

#9 Liquid

Some people like my high school teaching friend won’t likely need a $1.3 million savings portfolio because she has a defined benefit pension to look forward to.

If she lasts that long. An acquaintance of mine, who performed several decades of on-site structural maintenance for school districts, once told me his observations of the career progressions of new teachers who he was able to observe on a day-to-day or weekly basis.

They generally come in all fired-up and green, then by the fifth year of teaching usually become jaded and are rarely around and teaching anymore by the seventh. Which is probably a shorter average core career than that of a typical Wall Street analyst or pro-league hockey player. A few book enough years to reach the relatively early pensionable retirement for a teacher, but they seem to be the exception.

#40 Soylent Green is People on 08.28.13 at 11:18 pm

But Harper wasn’t done yet. “Sit down.”

“You’re a journalist,” he said, “and we all know journalists make bad politicians. Politicians know how to stick to a message. That’s how they are successful. Journalists think they always have to tell the truth.”

http://www.garth.ca/2009/04/29/me-vs-stephen-harper/

ABOVE IS SO IRONIC CONSIDERING HARPER AND DUFFY AND PAMMY AND KENT ETC ETC.

p.s. Dat baby biker pic yesterday was F*35ing hilarious.

.
.
.
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#41 Jonah on 08.28.13 at 11:19 pm

@ notImpressed,

How about i give you statistics about how it is in Richmond Hill which is hotter than Markham at any given day. There is a 2200 sqft property listed for rent close to Highway 7 and Leslie, all yours for $1800 per month plus utilities. if you were to buy a similar free hold town home in that area, it will cost you around 550,000. With rent, you are paying 2000 per month and if you were to buy that place you would be paying $2,507.86 + property tax not including maintenance and initial costs plus 20% down. I calculated $2,507.86 based on 25 years at fixed rate of 2.66 for 25 year term and you know no bank will give you that rate even for 5 years. So do the maths and be ready for epic fall.

#42 Obvious Truth on 08.28.13 at 11:25 pm

Most people think that a million dollars is impossible to save and don’t think they will need it but they will give the bank a million dollar guarantee.

Strange?

The norm used to be defined benefit pensions weather you worked at a manufaturing plant, as an electrician or as a public servant. They don’t realize that these pensions are probably worth 800 000 or more fully vested. Those living on these pensions are not wealthy. They can just afford day to day costs and to keep up their home. If you don’t have one of these you need a million at least because there are no guarantees for you. And it is possible on a regular salary. Its not a luxury, its a need. The exact opposite of a mortgage.

Or better yet use the investment calculater instead of the mortgage one before you buy a house.

Guys like Timmy have heard the wrong message for too long. It’s not totally their fault because they alone can’t create an asset bubble.

Even our finance minister has given you a savings vehicle gift and told you prices are too high. Its hard to believe that household finances are being run by sales people and media.

Da Nile grows longer but has more room for swimmers.

On a positive note it is great to read comments from young people on this blog. Many have been introduced to the power and satisfaction of saving and investing. Their sense of accomplishment comes through. Here’s hoping they keep learning. They will have their million.

#43 Devore on 08.28.13 at 11:25 pm

#9 Liquid

Some people like my high school teaching friend won’t likely need a $1.3 million savings portfolio because she has a defined benefit pension to look forward to.

She still needs $1.3M to generate said income in retirement. It’s just that part of it will be sitting in the pension plan, money she paid in by taking a lower salary. (Oh the jokes, they practically write themselves.)

#44 dienekes on 08.28.13 at 11:36 pm

I myself do not know of anyone who does not live pay check to pay check. Wage earners are doomed.
Talking to a client the other day who is actually thinking about buying a 180,000 dollar wake boat. They actually offer 30year loans on these things. Apparently people do it. Crazy
If all your cash except RRSP’s is held in a closely held corporation, does that count as living paycheck to paycheck? A pile is building up in there, 5 times what is needed to operate the company, how do you move it over without being taxed to death?

#45 Arse on 08.28.13 at 11:40 pm

The long term prospects don’t look good, imo.

#46 Arse on 08.28.13 at 11:42 pm

I think the FED is serious about exiting from QE in a gradual manner.

#47 Obvious Truth on 08.29.13 at 12:07 am

Hey Garth.

Ever thought of a simple model portfolio that could be on the page updated daily. Maybe starting with the same amount needed to buy the average house and 500 or 1000 a month in contributions. Rrsp Tfsa split.

Then beside it the cost of a house updated monthly including average maintenence costs of 2 to 5 percent annually.

Would that be too expensive to set up?

Maybe the government could help with the cost as a public service.

How bout Century 21? They might want the naming rights. I hear on the radio they are certified in giving investment advice. (Bet the flip chart sales manual has fancy pie charts)

#48 The Man From Nantucket on 08.29.13 at 12:09 am

Mortgage breaking, IRD, Interest penalties:

Thanks to the two posters that pointed out my idiocy in my comment on yesterday’s entry.

You’re absolutely correct Rising rates = better if you have to break a mortgage. They can’t claim lost profit if present rates are higher..

#49 Cici on 08.29.13 at 12:12 am

#13 Smoking Man

I think we were just thrown off because you spelled it right (backwards).

:-)

#50 The Man From Nantucket on 08.29.13 at 12:14 am

Western Canada, re teachers:

In Ontario, most teachers (and in fact most public servants) tough it out until the magic ’85’ number, and they retire with a pension far better than most.

Teachers used to get a few other neat perqs like cash for unused sick days up to like a year’s pay.

I wouldn’t do it, but, if you’re willing to be a tax-wage slave, it ain’t as bad a gig as most.

I certainly have not met many in the private sector that “used to be” a teacher, or “used to be” a civil servant…..

your experience may differ.

#51 Bob Rice on 08.29.13 at 12:31 am

“Realtor 1” are you one of the 36,000 GTA agents barely scraping a living? No they won’t hit 2009 prices.. more like 2002.

#52 a prairie dawg on 08.29.13 at 12:48 am

Nothing to worry about. The Prorogue Conservative Party is in charge. War time jobs and condos for everybody.

Now there’s an Economic Action Plan for you!

#53 Carpe Diem on 08.29.13 at 12:51 am

#13 Smoking Man

Sorry I would have caught that in a second … but my issue is more attention and I never got to that posting!

#54 The shill — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 08.29.13 at 12:54 am

[…] via The shill — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#55 Carpe Diem on 08.29.13 at 12:58 am

SM …

So I’ve been in the IT industry over 20 years. I’ve done my share of crypto-coding. There are plenty of solutions out there related to private-public key encryption. PGP comes to mind.

I’m not clear on your business angle hear since there are other gorillas in this space.

I think I found your .org site.

Love your entries …

#56 aprilNewwest on 08.29.13 at 1:09 am

CKNW news report today. Used condo sales in Vancouver down 8% and new down 20%.

#57 Fed-up on 08.29.13 at 1:17 am

@#28 Realtor #1
————————————————————————–

You’re right, they will reach 2003 levels. You have my sympathies.

#58 wallflower on 08.29.13 at 1:38 am

YOLO – you only live once
None of this sha-na-na stuff

#59 angela on 08.29.13 at 1:39 am

Garth you mortgage rules have tightened in the USA ,dont think so please dont mislead people this link says otherwise
http://www.cbsnews.com/8301-505145_162-57600462/government-relaxes-mortgage-down-payment-rules/

#60 TRT (TheRealTruth) on 08.29.13 at 1:43 am

First post in a year. Regular poster since 2009.

I’ve told many brothers and sisters on this blog in 2009 and 2010 to buy a house…a detached home in Vancouver or Toronto. I posted regularly and was blasted by regulars here (see archives) and was for a time banned by Garth.

In 2013, I say don’t buy a house in Toronto or Vancouver because you won’t be able to afford one anymore. What you have to realize is that MONTHLY PAYMENTS are not going to change for the foreseeable future. If rates go up substantially as Garth predicts, we may get a devastating 15% correction. However, your monthly payment if you buy after the correction will be the same.

My advice now to those waiting for “a devastating 15% correction” is to move to another region of the country.

Told you so in 2009 and 2010. Yet you thought I was a realtor, etc. etc. etc. You made your bed so lie in it.

#61 ws on 08.29.13 at 2:10 am

Garth I feel like your contadicting yourself in this blog saying only a 15% correction may come, I think since you have recognized this as a housing bubble, has there been any asset/real estate bubble in recorded history that hasn’t crashed? I don’t think this one will end up any different as credit expansion/growth is hitting its limits. This is basically one of the biggsst credit bubbles Canada has ever had and all credit bubbles in recorded history crash. Also if a correction was to occur then what you are saying is there is basically no housing bubble. Also I feel this is an engineered crash as when it occurs, it will just be another wealth transfer from the citizens to the banking system and governments through bailouts or bail-ins. We will be just another country in the bag as each country goes through their own housing boom and busts and as the Netherlands is going through a housing bust as we speak.

#62 Notta Sheeple on 08.29.13 at 2:16 am

“….#17 TheCatFoodLady on 08.28.13 at 9:43 pm…”
=========================

Great post, Miss Mew!

Unfortunately, my own parents in their mid-eighties fit the profile to the T: 1970’s-built split level, minimal insulation, 70’s Hallowe’en orange shag rugs, burnt-orange appliances, forest-green bathroom sinks, tubs, and toilets, and two leased mini-vans. Add to that a never-used cottage with an interior mould problem and a rotten waterfront dock.

The weekly phone call predictably degrades into the usual stigmatization; I’ll never amount to anything as long as I rent, there’s nothing like a golf-green lawn to show pride of ownership, yadda, yadda. This coming from parents who both have (now-rare) defined benefit pensions.

The fact that I drive a paid-for 10-year-old Saturn with a no-rust, plastic body that looks as new as the day it left the showroom, I pay no utilities, condo fees, maintenance, nor property taxes and can sock away $2,000 per month into a variety of registered and non-registered plans is totally foreign to them.

Thank God my girlfriend reads this blog.

#63 Bobby on 08.29.13 at 2:28 am

For #24 Stuck on an Island,
I would revisit those you can trust. Out and about with some out of town friends looking at real estate the last few days. The number of for sale signs was huge, in particular on Bear Mountain. Counted 8 houses for sale on 1 street alone. There are reduced and new price signs everywhere. Many of the homes are empty.
Many of the homes where I live have been on the market for months.
A house is worth what someone will pay, not what some hapless realtor thinks it is worth.
No, this will not end well.

#64 willworkforpickles on 08.29.13 at 2:31 am

Take your aspirins tape your eyes open and keep on working America. They will have to raise the retirement age to 100 to avoid dealing with those unfunded pensions.

#65 John Prine on 08.29.13 at 2:35 am

Unplugged on 08.28.13 at 9:39 pm
Garth you MUST BE WRONG! Look at what the REALTORS are saying.. the recovery is already taking shape according to the most highly qualified individuals in the industry! Take this for example: http://www.youroklife.com/summerland-bounce-back-market-august-2013/
____________________________________________

SO FUNNY! ask for local references on this realtor!

#66 John Prine on 08.29.13 at 2:42 am

#24 Stuck on an Island on 08.28.13 at 9:59 pm
A RE agent in Victoria today (one who is trust) said he didn’t think houses would go down anymore in Victoria and stay flat for the next 4 or 5 years.

Any comments?
————————————————————–

“One who is trust”????

Why is that? Nobody knows what is going to happen with prices, common sense says prices are going down slowly as vendors who have to sell will lower their prices and get on with their lives. Remember, a lot of sellers bought 10 or 20 years ago so selling for $339,000 will be a 100% profit if one discounts maintenance over the years……don’t forget the increasing BC Ferries fares as they are discouraging many from moving to the Island. The old realtor saw “Everybody wants to be here” doesn’t wash anymore.

#67 Notta Sheeple on 08.29.13 at 2:44 am

#28 Realtor #1 on 08.28.13 at 10:06 pm
Prices will not reach 2009 levels. My condolences
=========================

Maybe. Maybe not.

One thing is for certain right now. There are currently 2009 smug REALTURDS® becoming unemployed every month.

My condolences.

#68 Jane 54 on 08.29.13 at 2:48 am

Boomers will not take up the slack on new condos.

1. Modern condos are too small, boomers have a lot of stuff and their furniture like dining room sets can be huge.

2. Boomers will not be able to afford (or will not believe it offers value for money ) the service charges on modern condos and have no use for all the frills included like exercise rooms and tennis courts.

3. Boomers will buy or rent older low rise condos as closer to services and more room for the money.

4. Bungalows close to transport and services will boom. They are not building any more of these due to large footprints required.

Basic Marketing 101. Product offer has to suit the client needs or they won’t buy.

cheers

#69 Bubu on 08.29.13 at 3:13 am

#24 Stuck on an Island

Well, since the apparently never-ending and oh so much faster moving gift from across the pacific (Fukushima) is arriving, I can imagine that things are going to change quickly on V.I.
My plan was to make a move to the island next year, but now I am eying the Atlantic coast and feeling better about this decision each and every day.

Hey, you might even see a east-bound migration off the island?
Never know these days!

#70 Tony on 08.29.13 at 5:21 am

Re: #22 Igor on 08.28.13 at 9:57 pm

Aurora doesn’t sound much like Markham. Houses at the present time are *not* selling in Markham. Higher mortgage rates are the culprit.

#71 Ralph Cramdown on 08.29.13 at 6:50 am

#17 TheCatFoodLady — “These may be reasonably well built, (by today’s standards), homes but most are due or close to due for major work. They’re anything but the open plan today’s families like.”

This illustrates an opposition I’ve had to several posters lately who’ve said that today’s North American houses are shoddily built compared to concrete European bunkers which will last a hundred years or two.

Well yes, they are. But preferred housing styles in North America have been changing a lot faster than that. Open concept? Ensuite bathrooms? Number of bedrooms? Outside air exchanges per hour? Insulation R value in the walls and ceiling? Best not to overpay and get something flexible, because by the time you want to sell, styles will have changed and the buyer may well discount the cost to renovate.

#72 Ralph Cramdown on 08.29.13 at 7:02 am

Ah, the North Shore…. Riviera of the Lower Mainland. I just got back from a visit, and can report that all remains loopy. A hint to retirees: If you’re hoping to live on the North Shore, and eat, keep saving. Grocery prices are insane; it’s like they don’t know or care about the free market. “That’s what the guy closest to me charges, so that’s what I pay.” And don’t forget to add the eco fee and recycling charge. If any young hipsters want to bowl, Park Royal’s available with plenty of free parking and no other shoppers to speak of.

#73 Victor V on 08.29.13 at 7:43 am

This house in Yonge/Eglinton has gone from $3950 to $3150/month.

Either the owners are desperate or something is seriously wrong with the property.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13493703&PidKey=1613322363

#74 Condo Minion on 08.29.13 at 7:50 am

Uh…oh…….this is getting scary for flippers and anyone who has bought in recent years and not lived in a home for a reasonable length of time:

http://www.thestar.com/business/real_estate/2013/08/29/tax_auditors_target_condo_sellers_in_hunt_for_flippers.html

Some key excerpts:

“Toronto tax lawyer William Howse is warning realtors in a two-page bulletin, now being distributed to brokerages, that they also could be inadvertently swept up in the net.
He cautions that if they have advised clients to cash in their condos or new homes too soon after construction is completed, even to use the gains to buy up, they could have clients sue for advice that is deemed to have run afoul of the taxman.”

“Even tax lawyers acknowledge they’re seeing more people with little knowledge of legal and tax requirements jump into the market.
Some have been buying and selling condos as investments, without even disclosing the deals to their accountants, or getting HST rebates on new investment properties.”

“But, over the past year in particular, auditors seem to be taking more of a tax first, ask-questions-later approach to even deals involving principal residences, which have been traditionally exempt from capital gains taxes, tax lawyers say.”

#75 fancy_pants on 08.29.13 at 8:05 am

We savers are taking it for the team. Now I feel better.

http://www.dailymail.co.uk/news/article-2405075/Bank-Englands-Mark-Carney-Rock-rates-greater-good.html

#76 Catalyst on 08.29.13 at 8:27 am

I have yet to encounter a single wrinkle that is planning on buying a condo – they simply are way too small and too drastic a change from their mcmansions they have lived in all their life.

My grandmother recently sold her house and rents a 3 bedroom lowrise..for herself.. because everything else was too small.

The 550sqft condo owners who saw this as their exit strategy are in for a rude awakening.

#77 Caveat Emptor on 08.29.13 at 8:27 am

To all would be condo buyers:

http://tinyurl.com/qhjycsy

#78 Great research buddy on 08.29.13 at 8:32 am

#42 Republic_of_Western_Canada on 08.28.13 at 11:05 pm

If she lasts that long. An acquaintance of mine, who performed several decades of on-site structural maintenance for school districts, once told me his observations of the career progressions of new teachers who he was able to observe on a day-to-day or weekly basis.

They generally come in all fired-up and green, then by the fifth year of teaching usually become jaded and are rarely around and teaching anymore by the seventh. Which is probably a shorter average core career than that of a typical Wall Street analyst or pro-league hockey player. A few book enough years to reach the relatively early pensionable retirement for a teacher, but they seem to be the exception.

What a great study based on a janitor’s comments. Sadly, the downside of blogs is that they give a mic to individuals that will say just about anything just to hear themselves.

#79 Smoking Man on 08.29.13 at 8:44 am

Gatho hits one out of the park with his call to buy banks

From financial post

RBC hikes dividend 6% as profit soars to record $2.3-billion

Good one garth

#80 Gotthardbahn on 08.29.13 at 8:55 am

Garth –

Get a grip, already.

I’ve been saying for years that this predicted wave upon wave of boomers retiring leading to a labour shortage was pure fantasy. Boomers in the private sector, in the non-managerial class, are, with few exceptions, working on Freedom85. Civil servants – like you – and corporate executives have it made, but the vast majority of grunts who earn little and see even that taxed to death, will be working until they die.

A grim scenario? Sure it is, but it isn’t all because Canadians are invested in real estate. Canadian employers are cheap and goverment taxes – at ALL levels – are high, making it nearly impossible for the average Canadian in the private sector to save ANYTHING.

I await your pithy soundbite response.

Sure. I’m not a civil servant. — Garth

#81 dave b on 08.29.13 at 8:57 am

#81 Catalyst don’t forget the elevators.

#82 The Strawman on 08.29.13 at 8:58 am

#21 william of the north.. you predict a building boom in Syria after the US and Canada drop a few bombs , well I predict a building boom here after the Russians drop bigger bombs on us.

#83 Don't shoot the messenger on 08.29.13 at 9:02 am

#22 Igor

#25 #4 you are so full of it!

#44 Jonah

#75 Tony

Hey don’t shoot the messenger. I’m not saying it makes sense but these houses are selling for over asking price in Markham. All the properties are in the Middlefield area and have all been sold within the past month.

House #1: Listed $599,000 SOLD: $650,000
House #2: Listed $599,000, upped asking to $609,000 SOLD: $607,000
House#3: Listed $599,000 SOLD: $672,800

These houses were selling for $370,000 in 2009. I just don’t see them dropping that low ever again.

#84 CrowdedElevatorfartz on 08.29.13 at 9:04 am

@#31 dienekes
“….Talking to a client the other day who is actually thinking about buying a 180,000 dollar wake boat. They actually offer 30year loans on these things. Apparently people do it. Crazy….”
+++++++++++++++++++++++++++++++++++

Apparently you haven’t been to a “Boat Show” in at least the past 15 years. I was reluctantly dragged to one about 5 years ago and was absolutely floored by the price for these “toys” and the financing that goes with them. 25 year “Mortages” for what basically becomes a depreciating status symbol.
I wonder if the same sheeple at these shows would line up to pay a 25 year loan on a car……..

#85 CrowdedElevatorfartz on 08.29.13 at 9:10 am

@#53 Man from Nan

“In Ontario, most teachers (and in fact most public servants) tough it out until the magic ’85′ number, and they retire with a pension far better than most…”
++++++++++++++++++++++++++++++++++++

Isnt the Ontario Teachers Pension Plan shovelling out far more money than it currently takes in?

I expect ALL these cushy public employee pension plans are going to hit a debit wall in the very near future. I just cant see taxpayers willfully accepting even more onerous taxes to subsidize the elite few in govt jobs who are “garanteed” an iron clad payout on the backs of unpensioned taxpayers.

Cue outraged govt employees….. three….two…one…

#86 anon on 08.29.13 at 9:34 am

#29 Smoking Man on 08.28.13 at 10:08 pm

Why Garth continues to allow your anti-semitic hate speech is a wonder considering how public-profile his name and reputation are. Tell me more about the bad things me and my “tribe” have done to you Smoking Man, then maybe I can tell you the bad things your “tribe” has done to mine, and maybe see whose side of the scale fills faster.

Then again, when someone is using racist terms like zio- and “tribe” I doubt I’ll see much research.

Knock it off, boys. — Garth

#87 Bob on 08.29.13 at 9:40 am

#77 Ralph Cramdown – ” If you’re hoping to live on the North Shore, and eat, keep saving. Grocery prices are insane; it’s like they don’t know or care about the free market. “That’s what the guy closest to me charges, so that’s what I pay.” And don’t forget to add the eco fee and recycling charge. If any young hipsters want to bowl, Park Royal’s available with plenty of free parking and no other shoppers to speak of.”

———————————————————-

I live on the North Shore. Housing is crazy yes. But there is lots of competition for groceries. It’s as cheap as any place else in the lower mainland. Park Royal mall,is packed daily and there is no bowling alley anymore.

#88 Jean Le Putin on 08.29.13 at 9:44 am

Connect the dots and you can see how seriously whacked most people’s finances are Not here in Montreal, the best city on earth. Million-dollar homes keep going strong, half of them are bought in cash by corrupt immigrants who need to laundere their money; the govt is all too happy to keep their eyes closed. And single family homes in general are still rising in price. It is merely condo owners who are in a bad position here, those fools.

#89 Steven on 08.29.13 at 9:53 am

With house prices being insane and or criminal on the high side and wage rates being at least 40 years out of date and far too low there is absolutely no way a demographic and economic crisis can be averted forever. There has to be a resolution that restores sanity otherwise things will get very bad indeed.
Frustrated ambitions are often the fuel for revolution.
Do you all want to go there?

#90 Bob on 08.29.13 at 9:55 am

Ireland home prices heating up again:

http://www.independent.ie/business/ireland-fears-the-unthinkable-a-dublin-property-bubble-29534137.html

#91 For the retard in Markham on 08.29.13 at 10:02 am

#87
Hey don’t shoot the messenger. I’m not saying it makes sense but these houses are selling for over asking price in Markham. All the properties are in the Middlefield area and have all been sold within the past month.

House #1: Listed $599,000 SOLD: $650,000
House #2: Listed $599,000, upped asking to $609,000 SOLD: $607,000
House#3: Listed $599,000 SOLD: $672,800

These houses were selling for $370,000 in 2009. I just don’t see them dropping that low ever again.

You need to see a doctor.
First you begin with “houses in Markham are selling over the asking price”.
We point you to the facts (at least I did) and now you slightly adjust the tune referring to 2009. You must believe that you are not on a newspaper blog or a RE pumping site where shit like this is tolerated. No my friend, I would like to believe that it is not and yes the messenger should be shot dead metaphorically speaking. People like you are the most toxic persons, have no scruples all it matters for them is their own profit

The facts, just FYI, look like this for August:

http://pastebin.com/JLKwmnXb

Since May they sold 1832 SFH with 873 of them under the LAST asking price. Looked closer more than 873 sold well under the initial asking price (the seller had to reduce his initial asking price quite a bit)

PS: if you want to discuss the 2009 prices first look at who held the homes for 5 years, how much they paid in interest, maintenance etc etc and after that we can talk.

#92 Robert on 08.29.13 at 10:12 am

#83 great research it may not be but the average duration of a teaching career from university graduation may only be 5 years at best. Significant attrition occurs as a result of job scarcity, bad experiences in the classroom, moving, pregnancy, illness. The “survivors” who last through to the golden full pension are a hardy lot but most don’t live long enough to collect more than 3-5 years. Watch the obits; you’ll read few for octogenarian teachers.

#93 sciencemonkey on 08.29.13 at 10:16 am

I’m considering looking for work in the US polymer or biotech industry once my girlfriend finishes school. Let’s see what happens with my streamlined tax compliance filing… Also, I don’t know if I should worry about healthcare costs in the US.

#94 Pr on 08.29.13 at 10:21 am

The banks tell the government (Flaherthy) : Give money to every one, via us, the banks, to buy real estate. Specially the poor, and after many years, they will start to loose this same real estate.
At that point, you gouvernement (Flaherthy) pay us (the banks) and send the bill to your citizen! Voila!

If you dont see here, a possible temptation of coruption at any levels?

#95 Ben on 08.29.13 at 10:22 am

Hi Garth, great blog. It hit me, the soloution to the problem of the wrinklies and real estate. The reverse mortgage. Desperate times in the years to come, they cant sell for what they need and the bloated banks end up with a solid portfolio of residential real estate. This prolongs the market. Something will eventually give though I am sure, but what do I know, I’m just sitting here watching the wheel go round and round…..

Reverse mortgages are a wealth death trap. Stay away. — Garth

#96 Alberta Ed on 08.29.13 at 10:33 am

The Conference Board is whistling past the graveyard. When I read that (alleged) news story my unerring BS meter snapped into the red zone.

#97 rosie "moving forward" in the knowledge that, "this won't end well" on 08.29.13 at 10:52 am

# 98 robert

I found this in no time. It’s called research. Can you say research, I knew you could. Read paragraph 7. I’ll summarize to help you. The average teacher retires at 57 and lives to 90 in Ontario. http://www2.macleans.ca/2009/10/26/downsized-dreams/

#98 The real Kip on 08.29.13 at 10:56 am

” And gas prices are set to explode, thanks to a new war.”

100,000 dead over 3 years hardly makes it a “new war”. It’s new to you because your American buddies are about to blunder into another one.

Oh well, on the plus side, at least Mr. Harper won’t bravely send Canadians to die at Washington’s behest!

Spunds like the oxygen has thinned up there. — Garth

#99 Relax on 08.29.13 at 10:58 am

#97 For the retard in Markham

Relax. There’s no reason for me to lie. What I listed above was correct. I didn’t say all houses in Markham were going over asking price. I would love to see prices drop. I just don’t see it happening. I have been religiously following the prices of houses in the Middlefield area and all of the 2000 Sqft houses are on the market for <30 days and all sell over asking price. For the record I am not a RE pumper, I would like to see prices drop just as much as you would.

#100 Doug in London on 08.29.13 at 11:00 am

Boomers (or any other demographic) will rescue condos? The subject of condos keeps coming up so I might as well put in my 2 cents worth. Yes, I know that rounded to the nearest nickel that’s not much but will continue anyways. In March of last year I saw all those condos going up around Steamwhistle Breweries in Toronto and even then questioned the logic of building so many of them. This past Tuesday I spent some of the money I saved, as well as the dividends they pay, from buying all those dirt cheap REITs and preferred share ETF’s and went on the CN Tower edge walk. Besides being enjoyable, the great bird’s eye view really brought the subject of condos into perspective. Yes, I’ve heard the arguments in favour, like how more people are coming into the city and how the long commute times and high cost favour living right in the city if you work there. The question is, are there enough people coming into the city to fill ALL those condos? Did it ever occur to anyone that condos aren’t for everybody, especially people with kids? I sure wouldn’t buy one there at this point in time. A glut of excessive condos coming on the market has happened before in many cities, including Toronto and it could happen again.

#101 Rational Optimist on 08.29.13 at 11:01 am

89 CrowdedElevatorfartz on 08.29.13 at 9:10 am

Yep, Ontario public servants in particular are pooched (both at the provincial and municipal levels). It won’t be the taxpayers who do it, though, but rather the debt market. For some reason, taxpayers seem unwilling to express outrage at public servant remuneration and benefits completely divorced from reality. People who buy Ontario bonds eventually will, not get outraged, but decide that the amount owed to retirees is completely unsustainable, and price bonds according to that growing risk. This will come as interest rates start to normalize, the government won’t be able to afford that (40% debt-to-GDP in Ontario) and will have to find creative solutions, like not bothering to pay its pension obligations.

It’s too bad it will have to come to that, but the way Ontarians vote, it probably will. By the way, to the federal government’s credit, it has raised contribution rates by federal public servants so they will at least soon pay as much in to their own pension plans as the taxpayer does. Whether it will be enough, who knows. But Ontario’s in for it a lot sooner.

#102 Herb on 08.29.13 at 11:06 am

An object lesson for condo buyers and investors: – condo fee hike.

http://www.ottawacitizen.com/Financial+planner+takes+financial+condo+fees+soar+investment+unit/8844417/story.html

The low-balling of condo fees for marketing purposes is a ploy that has been around since condos were invented. Wonder how competent this “financial planner” is in other financial plans. Anyway, it’s unusual, and nice, to see this finally written up in an “advertising” newspaper.

#103 Second Hand Smoke on 08.29.13 at 11:12 am

#98 Robert on 08.29.13 at 10:12 am

#83 great research it may not be but the average duration of a teaching career from university graduation may only be 5 years at best. Significant attrition occurs as a result of job scarcity, bad experiences in the classroom, moving, pregnancy, illness. The “survivors” who last through to the golden full pension are a hardy lot but most don’t live long enough to collect more than 3-5 years. Watch the obits; you’ll read few for octogenarian teachers.

*** I’m not buying it. As someone above said, you rarely encounter people who “used to be a teacher.” On the other hand there are hordes of former lawyers, capital markets professionals, etc. who bail because of stress, ridiculous hours, etc.

I’m not diminishing the difficulty of teaching but the summers, winter breaks, March breaks, etc. surely mitigate some of the stress.

#104 happity on 08.29.13 at 11:19 am

Those boomers who stuck money in emerging markets are now a few more years away from retirement.

Hardly. The proper weighting in a balanced portfolio would be less than 5%. Developing countries will likely perform well over time. — Garth

#105 gladiator on 08.29.13 at 11:25 am

The Conf Board is looking at just one side of the equation: the boomers will snap up those condos, so all is well.
The one (teeny-weeny) thing they forgot to mention: those boomers must first unload their houses.
Who are going to buy those huge-reno-needing boxes? There are too few buyers left out there.

#106 Rational Optimist on 08.29.13 at 11:32 am

98 Robert on 08.29.13 at 10:12 am

Someone should look this up. I know a lot of “teachers” (I mean, graduates of teaching colleges) whose careers end before they begin, because of job scarcity. I know of none who leave after 5, 10 years, for any reason. As someone else noted, it’s rare to see someone moving from the public to the productive sector, or someone who “used to be a teacher.”

It’s crazy to suggest that “most” teachers who retire do not live longer than 3-5 years: someone who starts in his or her twenties can retire at 55 (with 60% of pay, indexed). Are you saying that members of a profession who are far-better-paid than the average, and enjoy better health and other benefits for their entire careers, mostly die well before the average?

For information about the Ontario Teachers’ Plan, you can visit their latest annual report: http://www.otpp.com/documents/10179/686250/Annual+Report/39482a3d-435c-40d1-96cf-cd6a38d6880a They themselves estimate that the funding shortfall is already over $5 billion.

#107 you relax! on 08.29.13 at 12:10 pm

#107 Relax on 08.29.13 at 10:58 am

Relax. There’s no reason for me to lie. What I listed above was correct. I didn’t say all houses in Markham were going over asking price. I would love to see prices drop. I just don’t see it happening. I have been religiously following the prices of houses in the Middlefield area and all of the 2000 Sqft houses are on the market for <30 days and all sell over asking price. For the record I am not a RE pumper, I would like to see prices drop just as much as you would.

Then just limit your statement to your street and give us a break. I did not bother to look at that neighbourhood in particular to check if what you are saying is true, no more time wasted with this.
Bottom line: think twice before you make statements that you can not support with facts.

#108 Shawn on 08.29.13 at 12:23 pm

HOW TO MIS-LEAD WITH THE TRUTH

Rational optimist at 114 says:

For information about the Ontario Teachers’ Plan, you can visit their latest annual report: http://www.otpp.com/documents/10179/686250/Annual+Report/39482a3d-435c-40d1-96cf-cd6a38d6880a They themselves estimate that the funding shortfall is already over $5 billion.

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

True, but misleading. They also report they are 97% funded. They have $130 billion in investments.

Teachers have NOTHING to worry about as far as retirement. NOTHING. You should be so lucky.

#109 maxx on 08.29.13 at 12:45 pm

Great post Garth.
You’re right on the money: boomers very likely won’t be lining up for cement coffins with a view, because most will also be looking for reduced carrying costs when they downsize.
Condo fees and special assessments quite often outpace the costs associated with detached/semi home ownership by a wide margin.

#110 maxx on 08.29.13 at 12:56 pm

#28 Realtor #1 on 08.28.13 at 10:06 pm

“”Prices will not reach 2009 levels. My condolences”

You’re absolutely correct- they’re going lower.

#111 DON on 08.29.13 at 1:16 pm

#32 Patient in Richmond on 08.28.13 at 10:23 pm

was over in Victoria for 2 days . Grabbed a tea at the local mc donalds and ened up talking to guy guy that has a drywall firm in Victoria . He used to have 35 employees when construction was booming . He is down to 3 ..

apparently farmer construction has cancelled several condo towers in Victoria due to low demand.

and so it begins…

*************
Funny you should post this…I was walking by a Farmer Condo Construction site yesterday, nothing has happened there for months. Most able bodies people are leaving to work in Alberta, flying in and out.. Most Government workers own second and third houses and are waiting for better times, lots of rentals on the market, never have I seen so many. University enrollment in the area is said to be up this year and to bring economic pluses to the area. Not sure if the recent uptick in enrollment is ONLINE courses and if we are depending on students to supply an economic stimulus we are really that STUPID. How can educated people believe in fairy tales? Answer: They have skin in the game and haven’t realized the game is over.

#112 Chill on 08.29.13 at 1:22 pm

#115 you relax!

I have supported my facts. I listed out the houses that sold over asking. Don’t call me a liar because you don’t want to believe facts.

#113 Rational Optimist on 08.29.13 at 1:32 pm

116 Shawn on 08.29.13 at 12:23 pm

“True, but misleading. They also report they are 97% funded. They have $130 billion in investments.
Teachers have NOTHING to worry about as far as retirement. NOTHING. You should be so lucky.”

Who said anything about teachers worrying about retirement? Obviously not: the taxpayers will continue to worry about it for them.

What’s misleading about the fact that their plan has a $5 billion shortfall? Do you happen to be a teacher? Is that why you’re so insistent (“NOTHING”)?

Ontario teachers’ pension plan is underfunded by $5billion, as reported by the plan, and they have had a funding shortfall for a decade, again as reported by the plan. The only way in which that might be misleading is because it is based on their own formula, which has not been updated for decades. It is based on assumptions that are no longer relevant. For instance, it assumes that teachers will contribute to the plan for longer years than they will draw benefits from the plan. Insanely, it is now the reverse. It assumes that there are x number of teachers for each retired teacher. That ratio is now 1.5:1, and soon enough there will be more retired teachers drawing against than plan than teachers contributing to it.

But you have “NOTHING to worry about as far as retirement.” It’s the taxpayers in this case who do.

#114 bob on 08.29.13 at 1:33 pm

Your thoughts betray you young Skywalker. I see great fear in you. Your mind has been corrupted by the dark forces. Believe not what you think as it will be your downfall.

#115 Old Man on 08.29.13 at 1:40 pm

The markets react to war or no war and time will tell who blinks first, or will the redline be crossed to satisfy the puppetmaster? Keep your assets in balance and diversified in times of uncertainty. There is a club for retired Generals in Moscow, and if a war breaks out they move a stationary satellite to view and intercept all communications, as they did this with the Iraq war of shock and awe. I will have access with English translations, but will not share the site with anyone, as you can watch the faux propaganda with the media. :)

#116 DON on 08.29.13 at 1:51 pm

#83 Great research buddy on 08.29.13 at 8:32 am

#42 Republic_of_Western_Canada on 08.28.13 at 11:05 pm

If she lasts that long. An acquaintance of mine, who performed several decades of on-site structural maintenance for school districts, once told me his observations of the career progressions of new teachers who he was able to observe on a day-to-day or weekly basis.

They generally come in all fired-up and green, then by the fifth year of teaching usually become jaded and are rarely around and teaching anymore by the seventh. Which is probably a shorter average core career than that of a typical Wall Street analyst or pro-league hockey player. A few book enough years to reach the relatively early pensionable retirement for a teacher, but they seem to be the exception.

What a great study based on a janitor’s comments. Sadly, the downside of blogs is that they give a mic to individuals that will say just about anything just to hear themselves.
*********************

The power of observation is the basis of all research and is not best on education or profession. You gain book knowledge (theory) at university/college but not commonsense and real smarts. Hence so many graduates who have put all their money into one asset.

Give YOUR head a shake.

#117 Rational Optimist on 08.29.13 at 1:52 pm

Oh, and since we were originally talking about how long teachers stay in their jobs: Drummond report says the average age of retirement is 59, the average term of employment is 26 years, and the average retirement period is 30 years. There are 2,600 retired Ontario teachers over the age of 90, including over 100 centenarians.

#118 Doug in London on 08.29.13 at 2:00 pm

@happity post #112:
Sounds like a good time to buy Emerging Markets funds if you haven’t done so already, or to increase your holdings if you already have some.

#119 Donald Trump on 08.29.13 at 2:01 pm

#90 CrowdedElevatorfartz on 08.29.13 at 9:10 am

Isnt the Ontario Teachers Pension Plan shovelling out far more money than it currently takes in?

I expect ALL these cushy public employee pension plans are going to hit a debit wall in the very near future. I just cant see taxpayers willfully accepting even more onerous taxes to subsidize the elite few in govt jobs who are “garanteed” an iron clad payout on the backs of unpensioned taxpayers.

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

I think it is far worse….

The way I am seeing it, many of these civil servants, especially teachers, are taking advantage of a corrupted immigration and foreign student “cash cow”.

If it wasn’t for this, I submit there would be many layoffs, given that cultural marxism doctrines (often preached in public schools) have resulted in lower domestic birth rates. Then, those that survived the gauntlet of cultural marxism , as they move to university, they have to compete with deep pocketed non- domestic parties.

Same goes for other civil servants would have no job if not for the sell out of our country and the citizens who are pushed further down the line..

One wise sage said 20 years ago that Gov’t could do its job with a 50% funding cut. In the present day I think we could cut even deeper and not miss a beat. Sure. we would have mush less breadcrumbs and circuses..but that’s the point.

There comes a point we have a communist system with them versus us….and IMHO we are almost there.

5,…4…,3..,..2….1…..let er rip whiners….

#120 Evangeline on 08.29.13 at 2:29 pm

Defaults are down and profits are up at CMHC

Financial Post – 4 hours ago

Canada’s largest provider of mortgage default insurance says defaults are down and its profits are up. Canada Mortgage and Housing Corporation, a federal Crown corporation, says for the second quarter of 2013 its losses on claims were $117-million, $51

#121 Canadian Watchdog on 08.29.13 at 2:34 pm

Canada Consumer Proposals up 1% y/y in June. Charts by Select Provinces

It's the new Canadian way. DEAL OR NO DEAL

#122 Rational Optimist on 08.29.13 at 2:37 pm

127 Shawn on 08.29.13 at 1:55 pm

As you know, there are multiple ways to calculate the health of a pension plan. The method that the Teachers’ Plan uses is based on the plan continuing forever into the future, and uses a formula ungrounded in reality- and even it results in a shortfall. If the assumptions were based on actual reality, the shortfall would be much greater. Having more active than inactive is necessary for a sustainable plan, and acknowledging that the ratio is no longer 10:1 is necessary for an accurate assessment of sustainability. Likewise accurate estimates about how many years members will contribute, and how many they will receive benefits.

By the way, that shortfall changes year-to-year, and it’s been higher before. But it’s never accurate. If the pension plan were rolled up, today, and became a defined contribution plan, its shortfall would be many times higher. It does not have enough right now to cover its liabilities, so why will that improve in the future as the number of retirees increases, and the retirees live longer?

As you say, contributions were inadequate, and remain inadequate. They will need to increase. Of course, the employer’s contributions will need to increase as well, and the employer is the tax payer.

#123 Timing is Everything on 08.29.13 at 2:39 pm

Interesting…Seems folks are paying their mortgages come ‘hell or high water’…

‘The already low rate of arrears on mortgages insured by the Canada Mortgage and Housing Corp (CMHC) declined further in the second quarter, an indicator which might temper concerns about a possible hard landing for the housing sector.’

http://tinyurl.com/q98v9rq

#124 Donald Trump on 08.29.13 at 2:41 pm

Petro-China executives face corruption probe.

Petro-China lost $1 billion dollars in market value in one day of trading, as investors bailed following news that the corruption probe in China had been expanded to include three executives at Petro-China.

http://lailayuile.com/2013/08/28/petro-china-executives-face-corruption-probe/

QUOTE:

Petro-China is a stakeholder in several Canadian projects, including heavy investments in Alberta’s oil and gas, as well as Kitimat’s LNG terminal.

QUOTE:

Liu Zhijun embezzled more than three billion yuan ($505-million), including $9-million in bribes. Investigators also discovered he owned 16 cars and more than 350 apartments, and supported 18 mistresses. (According to Chinese media reports, these figures represent about one third of what he actually stole.)

Zeng Chengjie, described as the Bernie Madoff of China, raised 3.5 billion yuan ($570-million) from more than 20,000 people, and was responsible for investor losses totaling 620-million yuan.

Both were found guilty, but guess which one was executed? Why Zeng, of course. The self-made businessman found himself unprotected after a clearout of officials who had encouraged him to get into the business in the first place.

Liu was the railways minister and a high-ranking Communist Party official with stellar family connections

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

Ay yes…the 2 sides of the same coin….Neo Con and Communist, but the Neo Con walks the plank every time.

18 mistresses? geez I hope at least a few of them were Siamese Twins.

#125 polecat on 08.29.13 at 2:52 pm

Don’t civil servants buy houses and cars and stuff like everyone else in the economy? They pay taxes too.

#126 rosie "moving forward" in the knowledge that, "this won't end well" on 08.29.13 at 2:58 pm

#129 donald trump

It’s much worse than you know. There are thousands of them. They eat properly and drink tea by the gallon. They are retired teachers and civil servants. They live forever. The hats prove their marxist sympathies. Over to you. https://www.rubylane.com/files/u2/red_hat_ladies_2.jpg

#127 Marginal on 08.29.13 at 2:59 pm

#127 Shawn

Good comment regarding context.

For those interested, The Walrus, had a good article covering the teachers’s pension (the best managed in the world apparently) and also more general pension issues.

The demographic issue is a challenge that will likely be solved by increasing the retirement age for teachers.

Jim Leech, head of the Ontario Teachers’ Pension Plan, had some good points, especially ” The reason the teachers have a very good pension is they were required to save”.

Given that “according to Stats Can, only 6 million Canadian tax filers put money into their RRSPs in 2011, with a median contribution of $2,830, almost $20,000 below the allowable maximum”, far too many Canadians aren’t even taking advantage of the savings programs that are available.

http://thewalrus.ca/pension-envy/

#128 TurnerNation on 08.29.13 at 3:07 pm

Time to buy a kaput on gold?

#129 Old Man on 08.29.13 at 3:09 pm

Now for those that don’t believe the price of gas is being rigged get this. The latest prices for the Toronto area across the board is 134.9 per litre. Yet in Ajax, Oshawa, and Whitby area is 123.9 per litre, as at a few minutes ago.

#130 Don T. B. Greedy on 08.29.13 at 3:39 pm

To Not Impressed
A friend of mine wanted to put her house on the market. The realtor suggested $745,900. She had no offers at that price. She listed it for $680,000 and a bidding war ensued. She accepted $740,900. If you make people think they’re getting a good deal, well, they’ll think they’re getting a good deal.

#131 Smoking Man on 08.29.13 at 4:01 pm

#92 anon on 08.29.13 at 9:34

Seams I have ruffled some feathers, what don’t you understand stand, I hate 99 present of the human race.

I am anti semitic, anti christian, , anti bodist, anti muslim, anti scientology, and any other group that gets together and preys to boggy man in the sky, trying to make a deal for a better after life.

After this life, we are just magot food.

These people are all insane, there is no God idiot.

I prefer to enjoy this life, get drunk, visit rub and tugs, smoke and eat bacon.. Love bacon……

And so does one on my like minded buddies, oh did I tell you, atheist and x Israel navel officer. He loves bacon too. Booze and rub and tugs.

No go back to your brain washing, praise the Lord….

#132 Form Man on 08.29.13 at 4:50 pm

#129 Donald Trump

are you related to westernman ?

perhaps you are his Saskatchewan girlfriend……..

#133 Post Haste on 08.29.13 at 5:03 pm

What BS from the banks that claim that those in their golden age need $54K a year to maintain their current life style. $4,500 per month – come on – it should be expected that by the time your hair turns white, you have a paid off home, your kids are on their own – you don’t need to use the car as much as you are home more often…it’s just another BS story so the banks can maximize profits from your savings and investments. I did a quick calculation on what my wife and I will be spending – not a jet setter but easily $1800 per month and that’s accounting for 2 trips per year.

I just read that seniors are the single largest group demographically that is racking up the greatest amount of debt – ah yeah – if they think spending $4500 per month – geez, does that come with someone to wipe your bottom ?

Lets get back to basics. I still remember having the family spend a Saturday afternoon in the backyard, bar-b-q, music – and it cost $100 tops for a day of fun – simple, easy and best of all – cheap!

The goal of life is not to be cheap. — Garth

#134 Post Haste on 08.29.13 at 5:10 pm

“House-flipping activity in the Scranton/Wilkes-Barre metro area more than doubled in the first half, compared to the same 2012 period, according to RealtyTrac. ‘The return of flipping is a signal of a return toward a normal housing market,’ said Austin Jaffe, Ph.D., chairman of the insurance and real estate department at Penn State University. ‘When housing prices stabilized in recent days, downsize risk is limited for investors who wish to flip. The average gross profit on first-half flips was 43 percent in the metro area and 31 percent statewide, according to RealtyTrac. The national average was 9 percent. The averages exclude investments made between the purchase and resale. ‘The prospects of significant appreciation will fuel a new flipping boom, if one exists,’ Dr. Jaffe said.”

Things never change – it’s the new economy – flipping is the last bastion for an average guy to score big or work at Walmart, welcome to the new future.

#135 Spiltbongwater on 08.29.13 at 5:17 pm

The goal of life is not to be cheap. — Garth

It is in my blood to be cheap. But then again, my Grandfather sang in a Welsh Boys Choir.

#136 Donald Trump on 08.29.13 at 5:34 pm

#143 Form Man on 08.29.13 at 4:50 pm

#129 Donald Trump

are you related to westernman ?

perhaps you are his Saskatchewan girlfriend……..

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

We are all children of the universe…related via a common ancestry as the Good Book explains.

Except maybe some of you with ” _____Man ” monikers

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

#137 Donald Trump on 08.29.13 at 5:44 pm

#142 Smoking Man on 08.29.13 at 4:01 pm

” I am anti semitic,”

” And so does one on my like minded buddies, oh did I tell you, atheist and x Israel navel officer. ”

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

That’s why your fan base is growing…your consistency is truly uncanny if not outright amazing.

PS God says Hi. If the Maple Leafs win you get an extra year.

#138 Shawn on 08.29.13 at 5:52 pm

Reality versus Doomsday scenarios

Rational Optimist at 132 see Marginal at 137 for a dose of reality. Do you really think the actuaries at Teachers are no aware of the demographics of the plan?

Mark my words, pension deficits will improve with higher interest rates this year.

Pension-envy indeed.

#139 Entrepreneur on 08.29.13 at 5:56 pm

Right now most people are in debt especially in real estate and with higher house prices means higher mortgages, etc. Incomes go to having a place to own and
most owners do not have savings. Not much money for spending. When spending is directed to one field like real estate means no money for anybody else.

This is playing out like a bad game of Sudoku. In Sudoku when the numbers do not fall in line you got it wrong. Debt does not help the economy maybe for a short time but not in the long run. Who has money to buy and support the small business?

Small businesses are hurting, no pensions for them, no real help, you can sink. They have taxes, paperwork everyday, trying to succeed. No one has the spending power, it is all in real estate. Most are jumping ship and working at a big box store.

We were taught to shop at a small business as much as you can to support them and the economy. That is how to every consumer can contribute to their community. In Sudoku the numbers will fall in order if played correctly as in the economy. Shop wisely and support your local small business as they are the ones who gets the money flowing and moves the economy.

#140 Smoking Man on 08.29.13 at 6:07 pm

#147 Donald Trump on 08.29.13 at 5:34 pm

It ain’t a good book Don, it’s prevented if actually one reads it from a un bias perspective.

I’m so happy I’m not part of humanity, Alian blood here.

The earth, my people relish in killing your people’s kids, your people’s relish in killing the other kids.

More kids have been killed and murdered by religion historically than all the kid killing diseases put together.

Praise the Lord and the good book.

You listing anon…… You to Mohamad..

This is over. — Garth

#141 Canadian Watchdog on 08.29.13 at 6:18 pm

#149 Shawn

Your optimism only works on-balance sheet. Try assessing off-balance sheet liabilities and you’ll see how insolvent pension funds already are. It’s not even debatable.

#142 Smoking Man on 08.29.13 at 6:22 pm

This is over. — Garth

OK, god has spoken

#143 Smoking Man on 08.29.13 at 6:40 pm

OK Don the leafs will win this year. An official sanctioned smoking man prediction

Universal conscious consolidation machine told me in a dream.

Never bet against a drunken smoking man, 6:41 and I’m hammered.

Love life, thank you et.

#144 Suede on 08.29.13 at 6:47 pm

Interesting : I’ll make sure your winter olympics don’t get bombed and you turn your back on your pal Syria.

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10266957/Saudis-offer-Russia-secret-oil-deal-if-it-drops-Syria.html

As-Safir said Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord. “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us,” he allegedly said.

Of course, he ALLEGEDLY said this. Great reporting on smoke.

#145 CrowdedElevatorfartz on 08.29.13 at 7:00 pm

@#148 “The Donald”
“…PS God says Hi. If the Maple Leafs win you get an extra year….”
+++++++++++++++++++++++++++++++++++
Geez, beer out the nose HURTS!

#146 Smoking Man on 08.29.13 at 7:27 pm

DELETED

#147 Daisy Mae on 08.29.13 at 7:35 pm

#4 Not Impressed: “One most was listed at $599,000 and sold for $672,500. How’s that for a slowing market?”

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

YOU’RE not impressed? I’m not impressed. Talk about ‘greater fools’….

#148 Donald Trump on 08.29.13 at 7:55 pm

#157 CrowdedElevatorfartz on 08.29.13 at 7:00 pm

@#148 “The Donald”
“…PS God says Hi. If the Maple Leafs win you get an extra year….”
+++++++++++++++++++++++++++++++++++
Geez, beer out the nose HURTS!

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

Get the bio- plumbing checked…..

We all know beer is rented, but its return route was pre-planned long ago.

#149 bigtown on 08.29.13 at 8:12 pm

A family member was blessed and sold her Oak Bay cottage (under 1 million) in Victoria, B.C.

Now she is renting a room; some folks really shine when it comes to cash management.

In the states cash buyers are in the majority showing it is hard to get financing. How long can the cash horde exist?

#150 Smoking Man on 08.29.13 at 8:28 pm

DELETED

#151 jess on 08.29.13 at 8:49 pm

Swiss Agree on Program for Banks to Settle U.S. Dispute Bloomberg
See also: U.S. And Swiss Reach Deal On Evaders—More Guilty Pleas Over Offshore Accounts Forbes
=
vultures
argentina /holdouts …”default on all or pay all” –
http://www.aljazeera.com/indepth/opinion/2013/08/201382871453651736.html

#152 espressobob on 08.29.13 at 11:05 pm

!7 TheCatFoodLady

Sounds like a failure to plan ones financial future? Typical! Know many in this boat and frankly have no sympathy for their lack of knowledge on the subject!

They get caught in that GIC trap quicker than than we can say ‘don’t do it’. Didn’t bother to learn! Most of us have been there.

But there is a better way! Learn about a discount brokerage account, ETF’s, the diff between a rrsp, tfsa, & non registered. Asset allocation, and very important, tax implications across each account. Most won’t do this, Pity!

Whats wrong with averaging in Cdn pref’s or some Cdn equity spewing out div’s and handing the accountant a T-3 each year?

Love your comments, gets me fired up. cheers!

#153 Edgar J Snowman on 08.30.13 at 10:24 am

First!

#154 Rob Nelson on 08.30.13 at 12:41 pm

I’m in Vancouver. Sold in 2011. Looking to get back into the market at some point. I wish Garth were right, but there has only been incremental movement in Vancouver proper (some of it upward, BTW). No collapse in sight.