Canada’s looming pension problem
There have been numerous theories about how baby boomers affect the economy as they move through different life stages. As retirement looms for the boomers there’s more talk about how this demographic will impact the economy at large. It turns out that Canada has one of the least generous public pension plans of any developed nation. This is good for the long term ability of the government to afford the cost of pensions, but brings up another potential issue: many boomers will face a large decline in their spending power.
The proportion of seniors in Canada’s population will balloon to as much as a quarter of the population by 2030, from 14 per cent now. Middle-class Canadians without a workplace pension plan or personal savings to fall back on face a sharp and sudden decline in living standards when they leave the work force.
With millions more retirees living on subsistence-level public pensions, the economy will see a lot less of the discretionary income that has normally fuelled consumer spending.
Many people in Vancouver seem to view real estate as the all-in-one strategy for retirement saving, but that approach hasn’t worked out so well here in the past, or in other cities currently going through a multi-year real estate market decline. Are you concerned about being able to afford retirement and are you planning ahead, or are you counting on the Canadian Pension Plan to be enough?
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October 26th, 2009 at 6:57 am
“This has been a great recession – it was short, but it is bringing a big restructuring and will require major adjustment in this country.”
Mark Carney/Financial Post/Oct.26,2009
Phew! That was close. Glad it’s all over with.
October 26th, 2009 at 8:35 am
It is difficult to tell if all of the talk around finances, housing and the markets the last two years has been a positive factor in raising the level of quality conversation around a Canada with more seniors.
As serious as the retirement subject is for us, and we will pay one way or another for our procrastination in delaying meaningful conversation, it appears that the business as usual thinking is still in play; read retail headlines and believe them, feel nervous about house prices and plan the next Saturday outing to Ikea.
October 26th, 2009 at 8:43 am
As someone who was born in the late 60s, I don’t expect that there will be anything left of the pyramid scheme known as the Canada Pension Plan by the time I qualify for it. Any measures taken by government to avert crisis with the Plan will ultimately be inflationary, so I store my wealth in precious metals.
October 26th, 2009 at 8:52 am
I was chatting with a doctor recently who told me that the stock crash last year also wiped out the predicted doctor shortage (they all have to keep working to make back their money).
I think our work force will “grey”, rules will change and we will see alot more people keep working well past traditional retirement age out of necessity. Instead of pimple faced teenagers at 7-11 we’ll see ma and pop (bitter ma and pop too).
October 26th, 2009 at 8:56 am
The retirement age is outdated anyway (and yes, I know it has legally gone, but the perception remains). 65 was fine when the average lifespan was 67. Now most folks live well into their 70s at least, and the average retirement age has to increase (yes, some will still retire early, good for them).
October 26th, 2009 at 9:28 am
It takes a special kind of stupid to make your house your entire retirement plan. Yes a paid off house is an ideal situation to be in when you retire but not if you have no other savings. I plan on having both retirement savings and a paid off house. Whether the house is in Vancouver or not depends on when this bubble pops. If it doesn’t pop soon than I’ll move to Hawaii and I’m serious.
October 26th, 2009 at 9:46 am
We can just defer our costs by not paying for anything along the way like how VANOC has defered paying suppliers and thereby when we retire we’ll all be able to report huge surpluses. We’ll call “Olympic Acoounting” and all retire rich. LOL. Build your debt people and die before the bill comes due.
http://www.vancouversun.com/bu.....story.html
Hey, the bottom line on the seniors debate is that they are getting poorer and more indebted by the day. The one sided systemic inflation that the government has built into the system has guaranteed that anyone who retired ten years ago is running out of cash fast and will be strapped long before they die.
The thing about living longer, as fewer living seniors are smokers and boozers ergo generally getting healthier means that their running out of money much sooner than their financial advisors over the past twenty years of retirement planning could have ever planned for due to the zero return enviornment.
At some point the demographic may move towards an increased frequency of residential selling not due to lifestyle choice but of financial neccessity. Now heres an interesting thought,
On an earlier thread there was a point of speculation that changes may have been hinted at in the capital gains exemptions. What if these exemptions were extended to claw back additional funds for OAP and CPP as seniors who draw them are assessed for need.
Oh, the cynical mind boggles at a government employees fantasy of clawing back all that hitherto tax free revenue into the huge hole of government debt created by the Cons for this phony stimulus which we all know is just patent politics in a drive towards a majority government at any cost. Dont forget that we have just passed the US in personal debt and somebodys going to have to pony up before the well runs dry. Is anyone forgetting what happened the last time Canada technically went bust.
Bad things, huge tax increases. The Libs settled the deficit on the backs of the lumpenprolitariat without so much of a whimper from the unwashed. Do you have the capacity to double your tax burden, thats the question. So, think of how the government feels when it looks at all that taxable money the seniors arent giving up.
On that point I think it is a fatal mistake for the Libs not having taken on the CMHC debacle publicly and will come back and bite them long term.
October 26th, 2009 at 9:57 am
A PS on the Mexican Flu/ H1N1. It is a National emergency in the US. Strangely, no movement from the Canadian government. I guess it must be the magic screen at the border that keeps us immune from any uncomfortable topics.
” Sadly, we’ve just had our 3rd child die here in the ****** metro area. I think they were, 16, 4 and 9 years old. Think the H1N1 is not serious? Don’t just judge it by numbers. With a metro population of around 700K, we shouldn’t have had 3 kids die by December due to influenza complications, let alone by the 3rd week in October. Sure, most people have nothing more than the equivalent of a bad cold with H1N1, but 2 of the 3 children who are now dead were not overtly at “high risk”. Only one of them had asthma. In all honesty, on Friday I was feeling apprehensive when my 12 year old daughter vomited after getting back from feeding her goats & horses Friday morning & then complained of a bad sore throat. My wife (an RN-BSN with an MS in physiology & biophysics) & I decided that we were not getting our daughter the H1N1 vaccination; we couldn’t have gotten her vaccinated by now even if we wanted”
http://urbansurvival.com/week.htm
October 26th, 2009 at 10:08 am
“I think our work force will “grey”, rules will change and we will see alot more people keep working well past traditional retirement age out of necessity. Instead of pimple faced teenagers at 7-11 we’ll see ma and pop (bitter ma and pop too).”
– Great, so the boomers with not only be passing on massive debts to the younger generations, but they’ll also be taking their jobs!
October 26th, 2009 at 10:40 am
With all the ‘granny money’ dissapearing up in smoke it means fewer dollars will be inherited. With an entire generation of basement dwellers pinning their hopes on inheriting grannies house and cash this is going to create a lot of desperate wannabe’s in areas like the west side who see the dreams of moving up going down the drain as granny sucks up more and more cash just to put food on the table and pay the property maintenance and taxes.
Granny is already subsidizing the current kids bills and vacations. What happens when the money runs out and the kids have to move instead of becoming ‘upwardly mobile’. A reverse mortgage loan means ‘for the life of the owner’ not the life of the occupant.
These sucking maggots are having kids and the cost of supporting them is skyrocketing, especially the dream of a higher education.
http://www.theglobeandmail.com.....le1337924/
October 26th, 2009 at 11:51 am
#10 The G&M article says that the cost of Uni can be less by ‘bunking with the parents’. true enough but it says that the cost savings on a four year program will be $30,000 on not living in res. I disagree, I have a kid in UNI res in BC now and the current cost about $1200 p/m all in year round because of summer programs to fill in credits just to get the four years done in four years instead of the five to six it is taking a lot of students because of the shortage of seats/lack of courses. Thats $58,000 for res inc food allowance( actually more with trip money home and clothing books etc etc) over the 4 years.
Tack on tuition ( and never mind transpo and a lot of other annoying stuff) and the current costs are a lot higher than the article suggests. If its this expensive now then its going to be a lot more expensive in 18 years time. Getting an undergrad degree and a teaching cert all on student loan is now about $80,000.00
October 26th, 2009 at 12:21 pm
I personally think we will see a return to multi-generational households – particularly if house prices don’t fall in places like Vancouver. Many cultures still do it of course, but I think it will become the norm for a lot of people as people live longer. We’ll see married couples with kids living with their siblings (married or otherwise), parents and even grandparents.
This generation of 30-somethings and under are going to be healthier than ever – fewer smokers and more aware eaters. Living to age 100 is going to become very normal so people relying on inheritances might have to wait a lot longer than previous generations and there might be a lot less to inherit as people spend their savings, etc just to enjoy a reasonable standard of living.
There’s no doubt our workforce will grey and people will work into their 70s. After all, someone retiring at 65 can easily expect to live for another 20 to 25 years – almost a whole working life – except this time without the working part.
And with older people all over the place, we will see changing demands for services. Sadly we’ll also see more conservative governments as people tend to become more selfish as they age.
The future is indeed grey. Smart people thinking about what career path they should follow will start training in medicine, physiotherapy, occupational therapy, law, accountancy and the trades. Smart marketers will go after the grey dollar.
October 26th, 2009 at 12:38 pm
@jojo: “This generation of 30-somethings and under are going to be healthier than ever – fewer smokers and more aware eaters.”
I’m not so optimistic. The only good thing is fewer smokers (of tobacco). Eating quality food costs money, and I predict its price will rise faster than anything. I see a future of over-mortgaged young adults eating cheap starchy foods, and not having the money for physical recreation or quality entertainment. They will retreat to a lifestyle of virtual reality and low nutrition. When they get foreclosed-on, their main concern will be how to re-connect to WOW or Second Life.
October 26th, 2009 at 12:50 pm
“@realpaul:
“My wife (an RN-BSN with an MS in physiology & biophysics) & I decided that we were not getting our daughter the H1N1 vaccination; we couldn’t have gotten her vaccinated by now even if we wanted”
I know you were just quoting the article realpaul, but I find it very sad that someone with a medical education would be afraid of innoculation, it’s morons like Jenny Mcarthy who have no education at all who are spreading lies based on a single study which was done nearly ten years ago, was proven completely false and the researcher who published it later admitted that he was bribed into arriving at certain conclusions in spite of a complete lack of evidence.
As it happens my wife has a PhD in Medicine and we’re getting our kids inoculated this week. So I take your RN and raise you a PhD (I hate when people quote RNs as supposedly knowledgeable sources, some are, but just like Real Estate agents, the vast majority are not, if they were that smart they’d be Doctors).
October 26th, 2009 at 12:55 pm
It looks like the tug of war between housing bubble and export economy is coming down on the exports side.
——————————-
http://www.bloomberg.com/apps/......txRDteZ9Q
Oct. 24 (Bloomberg) — Canada’s dollar dropped the most in a month over the past five days after comments from the central bank’s governor prompted investors to unwind bets policy makers would raise interest rates before the second half of 2010.
The Canadian currency posted its first weekly loss since Sept. 25 after climbing to within three cents of parity with its U.S. counterpart. Bank of Canada Governor Mark Carney, reiterating a warning that the nation’s dollar has grown too strong, said intervention “is always an option.” The Canadian economy grew in August, a report next week is likely to show.
——————————-
Bad news. If this “free” money doesn’t dry up soon, the fall from this bubble is going to be fast and hard as more and more sub-prime borrowers are sucked in. I was favouring a long slow decline but now I’m not so sure.
October 26th, 2009 at 1:23 pm
Don’t miss this self-congratulatory article:
http://www.vancouversun.com/bu.....story.html
October 26th, 2009 at 1:45 pm
@13 -No Longer Looking:
I agree. As the person who does groceries in our family I’m struggling to keep our monthly spending in check. I have to pay $7.00 for a dozen of real eggs these days, $20.00 for fish and $30.00 for a decent cheese… and these are Superstore prices…
The produce prices are not as shocking (yet) but the quality is following a downward spiral very fast… so it’s the same thing in the end.
A frozen McCain pizza for $4:00 seems like a life-saving score in comparison, especially when you’re mortaged to death (no pun intended)
October 26th, 2009 at 2:29 pm
MBA, bachelor, PHD, RN, yada yada yada….you do realize that all these fancy titles are relatively meaningless in an environment where people buy their education.
had the pleasure to work with a guy who has an MBA…OMG he has no clue…
Titles here are salary enhancers whereas in other countries they actually mean you’re smarter than others and you have to prove it…here titles mean your parents have deeper pockets.
It the same as with housing, you start giving student loans to help people to ‘afford’ the education cost and all it’s doing is driving education cost through the roof. Unis know how much folks can borrow and hence know they can jack up cost without loosing folks.
I’m thinking in an environments where education is free titles mean more.
October 26th, 2009 at 3:21 pm
@Hovering: “Instead of pimple faced teenagers at 7-11 we’ll see ma and pop (bitter ma and pop too).’
Yes, unless they are highly skilled and self-employed (like a doctor), elderly people are going to be taking the lowest jobs in the economy. Employers discriminate. They don’t want someone who is going to demand more pay (for experience), need more benefits and days off, and might die soon (many employers subsidize life insurance). This is brutal but true. If employers have good jobs with benefits, the boomers are last in line.
October 26th, 2009 at 3:28 pm
@Anonymous: Thankfully, there are lots of alternatives for cheap produce in Vancouver. Produce specialty stores and farmers markets offer better value than the supermarkets. If we can keep the developers out of the ALR than that should an advantage even after peak oil.
Thankfully, we’re renters so we can afford to have room for a deep freeze. We don’t have it yet, but I can see getting one for fish and meat sales someday.
October 26th, 2009 at 3:34 pm
#18
Well, I guess I will trust my medical diagnosis and contract negotiation to that high school graduate rather than a doctor or lawyer who took the time to invest in themselves and sought to improve themselves, while deferring gratification…
Currently, students only pay approximately 28% of their education, with the “state” paying the difference. In many respects, education is already subsidized to the point where individuals only have to fund a “fair” portion of their education.
By the way, in countries where the education is free, such as in Germany, you have the problem of perpetual students where individuals “collect” degrees because its easier than facing the working world. Or you can take the case of the UK, where their free education system means that everyone has an undergraduate, to the point that a degree’s ability to differentiate is severely diminished. The only way these individuals can get ahead is to keep seeking additional degrees…
Is any education system perfect? Of course not. But if you take the time to learn through university and develop the ability to think critically, or “learn how to learn,” this would not be a surprise.
October 26th, 2009 at 3:54 pm
how does one find rental housing? i’m just asking because postings here seem to imply craigslist postings are bad. do people still use newspapers for this sort of thing? if i can’t use craigslist, then how should i proceed?
sorry if it seems like a stupid question, but i’d like to avoid buying right now but would like a bigger place than what we’ve got right now.
thanks
October 26th, 2009 at 3:56 pm
“{Titles here are salary enhancers whereas in other countries they actually mean you’re smarter than others and you have to prove it…here titles mean your parents have deeper pockets.”
———–
And how is this different from the US, or the UK, or any other Western country? Your argument has no logical support.
#18 is right.
October 26th, 2009 at 4:01 pm
@educuntion: Nice generalization. I worked by butt off to pay my own tuition/rent for both my BSc and my PhD. I assure you that I didn’t buy my way through the defense. (And it’s not a salary-enhancer – I’m making half of what I was before my second degree. Academia doesn’t pay very well.)
[And to echo Drachen, we and the kids (3yr, 6mo) are getting the H1N1 shot asap.]
October 26th, 2009 at 4:46 pm
“…it’s morons like Jenny Mcarthy who have no education at all”
Morons can have an education, too.
Hmm…Dr. Goebbels, Dr. Mengele…
October 26th, 2009 at 4:56 pm
A significant number of boomers are going to be in deep sh!t.
Few reasons will contribute to this.
Ultra-low interest rates are punishing savers and those in “safe” asset classes like fixed income (usually seniors).
Necessities such as food and fuel will be rising in the future.
Declining home prices as boomers downsize their SFH in order to fund their retirement.
Possibly a double whammy here if they’ve taken out LOC against their home to help out their children with down payments to get them on the property ladder.
Canada will have no choice but to increase their immigration quotas in favour of younger immigrants.
October 26th, 2009 at 5:07 pm
re: perpetual students in Germany. They introduced a fee of 500 bucks per semester to get rid of these students. Gov funded education is a good thing. It’s compassionate and allows everyone a chance for a proper education and no matter poor or rich the really good ones can make their way up.
Look what the f$#%$%n Harvard grads did to the economy. Being successful CEO is not about being smart, it’s short term cheerleeding for whatever company gives you the big bonus check.
As for doctors, of course we need them, but it seems pretty hard to find a capable onde (that actually cares) in Canada. F&*ck i visited 5 doctors before finding out I had an allergy. And guess what, it wasn’t any of the doctors but google who told me this. After finding out that way i went to a doctor and guess what, he confirmed it.
i guess that’s the reason I’m a bit frustrated with this.
And then there’s the dentist – these guys get the degree for the money – that’s for sure. Maybe I still have to meet the honest dentist type, but it seems they all rip off our health care system big time. I know one who actually moved here from Sweden because it’s easier to rip of the system here
Anyways, point is, someone like George Bush would probably not have made it through highschool in Germany and not even the fact that the parents have money would have helped. In the twisted NA system this moron became president.
October 26th, 2009 at 5:09 pm
# 26
First, the theory that each successive generation will downsize has been around for many, many, years. The theory has yet to be play out. You would be surprised at the number of seniors who appreciate the size of home they have, and only move from SFH to assisted care facilities later in life (not in their 60s).
And for all those condo owners hoping for a swap with the boomers for their homes, you might be waiting a very very long time (perhaps another decade or so). If that is the case, good luck raising your family in your 600k two bedroom condo
Second, your purport that immigration is the panacea to Canada’s “boomer” problem. However, immigration as the key to sustaining Canada, is a myth that was generated in the 1980s to help the expansion of the Liberal Party of Canada’s base of political support.
The Conference Board of Canada concluded studies prior to the expansion of the immigration quota to the 200k mark which showed that a negative immigration rate actually increased per capita earnings, and hence the quality of life.
You have to start thinking outside of the box a little more, such as people working later in life, job sharing, increased productivity from technology, rather than immigration as the key to maintaining Canada’s way of life etc. More people coming to the country is not the de facto option.
October 26th, 2009 at 5:13 pm
#27: “no matter poor or rich the really good ones can make their way up.”
————
You do realize that in Canada any student with excellent grades can get scholarships that will fund (debt-free) them all the way through to whatever degree level they wish, don’t you? The “really good ones” are very well-supported here compared to many countries (eg: the UK).
October 26th, 2009 at 5:16 pm
#27
To some extent education has shifted more to a consumer good, rather than a means of learning. As tuition has risen, so to has the expectation that students will get a great job and have nothing but A’s on their transcript.
And yes, many people go into the professions for the money – always have and always will, but admittedly, more so in the last decade. This can be partly attributable to the influences of various cultures in this Province which value PSE as a means of: upward mobility; of family status; and potential marriage material.
October 26th, 2009 at 5:28 pm
#12, J, There are a lot of ‘west siders’ who are rooting for ‘multi generational housing’ to lose its stigama as parasitic because these current PG, AR, Kits etc fancy addressee’s are going to get cleaned out of the very pretentious area codes and into the dregs of Surrey or (shudder) ‘the valley’ when granny sells out to fund the ‘ol retirement. So, JoJo you have plenty of backers with that idea.
#13 NLL, totally agree, there are a lot of food poor mortgage rich families out there who can’t afford to eat proper diets now and feed their kids KD behind closed doors to keep the car lease in the drive way. Therre has been a big decrease in the number of kids in sports programs recently because of ‘affordability issues’. All real estate , no life.
#14 D, ya just a quote from a larger oiece ( attached) good overview all the same. But your right, we get ‘experts’ trotted out every time someone wants to buy media points. When I grew up we had doctors on TV recommending cigarette brands. dating myself I know. Don’t trust advertising or announcements from ‘experts’.
#15 jawboning is all carney has left, don’t mistake healthy profit taking from ‘being ’schooled ‘ by a lame duck government official. The $CDN will be back real soon as the US reaffirms its ‘benign neglect of the USD.
#17 A , that chickens shitting gold. WOW $7 !!!!!
#19 check out the number of elderly already taking those jobs, and it ain’t because they are bored.
#21 C, having lived in UK I can say that ‘everyone has a BA’ is really a stretch. The drop out rate in UK is huge and so is the working class poor.
#24 I, gotta disagree, more companies won’t interview without the shingle.
October 26th, 2009 at 5:33 pm
#28 C, glad you get the Lib/Imm connection, few do. Ontario had become a ‘plug and play ‘ franchise. Just redraw the lines and stuff an new group of beholden tribesmen in there to vote as they were told. Funny how there got to be so many constiuencies in Ontario eh? One every block in TO.
October 26th, 2009 at 5:50 pm
@Drachen:
That’s pretty insulting to an entire profession. People go into all sorts of careers for all sorts of reasons.
October 26th, 2009 at 6:05 pm
21:
“Or you can take the case of the UK, where their free education system means that everyone has an undergraduate, ”
————
Seriously, do some research. Undergrad fees are 3k a year (pounds) which is more expensive than here (more at Oxbridge when one adds college fees), and this cap is likely to move to 5k a year soon. Free? I think not.
October 26th, 2009 at 6:19 pm
34
“all undergraduate education is largely state financed (with tuition fees set at a maximum
index-linked £3,225 per year, repayable after graduation contingent on attaining a certain level of income, and with the state paying all fees for students from the poorest backgrounds)”
Quoted from YOUR same “worldly experience and knowledge” – aka Wiki …lol
Seriously do some research yourself….
October 26th, 2009 at 7:21 pm
@Credentialism Rocks: “You have to start thinking outside of the box a little more, such as people working later in life, job sharing, increased productivity from technology, rather than immigration as the key to maintaining Canada’s way of life etc. More people coming to the country is not the de facto option.”
I agree, we need to do better with what we already have.
There are endless numbers of young adults who aren’t meeting their potential so why add even more?
More immigration will just make Vancouver and Toronto more unlivable. It would be great if immigrants went where they are needed, in towns and smaller cities in economically deprived regions, but they won’t and we can’t make them.
October 26th, 2009 at 7:43 pm
35 – I’ve worked in UK academia. So no wiki-knowledge relied upon here.
The repayable thing you mention is income-tested: ie: loans , in the same way that students here are loaded with debt. Most middle class and other students pay these fees upfront or later as loans. And the bit about certain level of income, thats about 12k a year, which any job will give you. So, it is a loans system just like Canada, but with higher yearly fees. Rather different from FREE, no?
And the 5k fee limit raise will be in place within 3 years – an open secret within British politics.
October 26th, 2009 at 7:49 pm
@Anonymous #22: Pick a neighbourhood and walk up and down the streets on the 1st of the month.
October 26th, 2009 at 8:01 pm
By thinking outside of the box, CPP/OAS will be plenty for me once I hit 60. With a bit of savings, I should be able to retire at 55.
The plan is to move some place with a much lower cost of living then Canada. This means living like a local in those places, because I see a lot or retires in places like Mexico living consumeristic north american lifestyles by importing TV’s and washers and SUV’s.
I was working in Central America a few years back and renting a house for $100 a month. Torillas and beans and fruits and vegetables at the local open air mercado cost next to nothing. One can live pretty well on $300 a month.
Avoid supermarkets and shopping malls as they charge north american prices for things.
But even if one wants to stay in Canada, if one had a paid off small house in a minor city in Canada, and shopped at local green grocers and farmer markets rather then shopping malls and supermarkets, CPP/OAS would be plenty.
October 26th, 2009 at 8:05 pm
@No Longer Looking #36: Since we can’t make the immigrants move to small towns, why don’t we convince the caucasian boomers to move?
October 26th, 2009 at 9:02 pm
@Credentialism Rocks:
Just to correct an error when you said in the UK university is free. It isn’t. In the mid 90’s they introduced modest tuition fees. Also, it wasn’t until the fees started that the “everyone must get a degree” mentality started – i’m not saying it’s causative, just mentioning it.
Also, though the value of a degree have been devalued in the UK, many, many youngsters there still leave school at 16 without any qualifications at all. At one point i believe it was about 25% of the population.
October 26th, 2009 at 9:09 pm
@Boombust:
They may be loathsome, evil individuals but i’ll hazard a guess that neither Dr. Goebbels and Dr. Mengele were morons.
October 26th, 2009 at 9:41 pm
@asp: You’d think more boomers would sell during this rampant stupidity and move to a small town (especially if they have roots there). My BILs parents just sold their north Surrey house and bought an acreage in rural Ontario (where his father is from). I’d love it if more boomers did that.
October 26th, 2009 at 9:53 pm
@kansai_92:
“Canada will have no choice but to increase their immigration quotas in favour of younger immigrants.”
The average age of an immigrant is actually about 4 years older than that of the average of Canadian. Further, only 18% of immigrants are skilled workers, the rest are all family members (the government classifies immediate family as skilled though they’re obviously not).
So, increase immigration if you wish, but it’s going to have to be a different kind of immigration policy than the one we have now.
October 26th, 2009 at 10:09 pm
“This generation of 30-somethings and under are going to be healthier than ever – fewer smokers and more aware eaters.”
Fewer smokers but obesity rates are way up. This gen might be the first to have shorter ave. lifespans than previous.
October 27th, 2009 at 12:06 am
@Credentialism Rocks: That seems backwards to me: SFH with only 2 adults and condos with a family of 4. But that’s what we have.
Last year showed how fragile the market is — we were pushing 22k listings in Nov 2008. That’s all it took to cut the legs out from under the market and I don’t think it was mostly due to boomer demographic shifts.
October 27th, 2009 at 2:56 am
I highly doubt we 30+ year olds will live longer by natural causes. We work crazy hours to pay for our mega mortgage. We don’t take time off or vacations…to pay for our mortgage. We don’t eat well — because we are don’t have time to make a home made meal. We eat out a lot because we are too tired to make our meal and both parents are working. We don’t sleep well…because we have to wake up earily for crazy commute through crazy traffic…across bridges, construction zones and 1 inch of snow. We work crazy hours because of corporate downsizing/outsourcing/re-organization — you work those crazy hours…or you loose your job to somebody else who is willing to do it.
That’s the life of a 30+ year old techy — a lot of my friends are in the same sinking boat. And…most of them are stressed out and in very poor health shape. Most can’t even enjoy their mega home because they are so tired and stressed.
So…honestly…I think many of us 30+ year olds will die before 70 at this rate.
October 27th, 2009 at 8:20 am
@Vic: I agree. I am not in the tech industry like yourself, but am in an equally aggressive industry in which sleep and vacation are considered a weakness.
The days of 9-5 jobs are way gone.
More like 6-6 now.
October 27th, 2009 at 8:34 am
This is really just a note to myself so I can check later that http://cbw.livelistings.ca/ shows 19,691 active listings right now.
October 27th, 2009 at 8:37 am
@Vic: Death by a thousand payments.
October 27th, 2009 at 9:56 am
“I am not in the tech industry like yourself, but am in an equally aggressive industry in which sleep and vacation are considered a weakness.”
Just about the single most disgusting aspect of American work culture – I really hope people fight against it to the extent they can.
October 27th, 2009 at 10:53 am
Ok. So it says ‘initial claims are down 2.4% in August but…reading further it says actual unemployment is up 8.4% in the same time frame. Are we getting bamboozled here?
http://www.vancouversun.com/Mo.....story.html
Also I can’t believe the cascading incompetance being exercised by the ‘Health Professional’ sector of the government. Aren’t we paying these people more ’so as to compete with the best minds from private industry’? First the H1N1 scare is cancelled because of ‘not wanting to cause a panic’ so they don’t close the borders for people coming from Mexico when the outbreak started. SARS II anyone ?
No thermal scans or isolation for suspected cases coming in even though mass cases of people sick coming back from Mexico are reported and Asian countries have health inspectors doing thermal scans ON THE AIRCRAFT!! Our guys just say ’stay at home and phone your doctor if your feeling sick’. So the pandemic really takes hold and flashes through the population.
Next, they downplay the number of cases and hide the death statistics behind farcical announcements like ‘oh, they must have died from being fat or something else’ ( they got exposed as baldfaced liars for that one too).
Then, they cancel the production of the new vaccine so as not to have to have the extra expense of taking the regular flu shot vaccine off the shelf ( tainted blood scandal anyone?), so that when the pandemic really hits all they have is a surplus of bodybags which start showing up mysteriously in some communities. people begin to die in large numbers and the body count can’t be hidden anymore in this same time line. But still no apparent concern.
Embarrassment and anger at children dying spurs some action and a small amount of vaccine begins to flow although unsurely tested and coupled with an even greater amount of mercury contaminent so that children have to recieve multiple doses over a period of weeks. 1 in 1000 cases have produced severe side effects and thats only the numbers we get from the professionals, but who cares right?
Doctors drive themselves to the distribution centres to pick up vaccine for the most at risk patients in their practices are are told that as few as 40 doses are available per clinic. Stampededs occur at the few public clinics which open unannounced in some areas.
As I said , cascading incompetance from start to finish. And the only announcement from the Health professionals has been ” More deaths can be expected”. Lovely.
Theres going to be a few condo listings open up for the real estate vultures out there before we see the back of this.
October 27th, 2009 at 11:02 am
#52 T, it depends on where you read the story. The Vanc SCUM spins the story to the ’sunny side’ while the G&M reports the actual rise in unemployment in BC without the blatant cheerleading.
http://www.theglobeandmail.com.....le1339751/
-totally agree on the flu story BTW
October 27th, 2009 at 12:22 pm
“I am not in the tech industry like yourself, but am in an equally aggressive industry in which sleep and vacation are considered a weakness.”
“Just about the single most disgusting aspect of American work culture – I really hope people fight against it to the extent they can. ”
Seconded. We’ve got our priorities so screwed up here in North America it boggles my mind, although I’ve noticed in my generation (late 20’s right now) the irrational Protestant Ethic is starting to lose its grip, here’s hoping…
October 27th, 2009 at 12:37 pm
Regarding immigration, don’t buy the hype. There are only two things that can drive growth in any society: productivity increases and/or population growth. The first results in real benefits to society, while the second simply increases our consumption of finite resources which doesn’t provide any net benefit over the long-term.
Increased immigration simply lowers the standard of living for society as a whole by increasing the supply of workers thereby driving down what people will accept in terms of not just wages but also density, pollution, etc. Any growth that results would be of the inferior, population growth-type, instead of the superior, productivity-type.
Many Euro countries have figured this out, keeping their living standards high by limiting immigration, while also continuing to have GDP growth mainly through productivity increases.
October 27th, 2009 at 12:48 pm
55 – excellent post. Huge influxes of immigration only benefit the wealthy and powerful (especially large landowners). The rest of us have to live with less.
October 27th, 2009 at 12:51 pm
to truthphobic 52
———-
There’s no point in thermal scans or border measures as the disease is already here in the community. That is a basic aspect of late-stage pandemic planning.
October 27th, 2009 at 1:00 pm
54 “(late 20’s right now) the irrational Protestant Ethic is starting to lose its grip, here’s hoping…”
Hate to break the news to you, but your generation has no work ethic to begin with. There is no solid protestant work ethic to lose.
Your generation demands work/live balance, flexible work hours, high starting salaries and continuous increases to match your instant gratification conspicuous consumption lifestyle (regardless of whether they are warranted from a value perspective), access to all senior projects and job duties. There is no concept of “putting your time in” and when all of the above are not achieved, you move on to the next job. Nothing wrong with that, but there is no point in expending training resources on you when the company will not benefit…
I chalk it up to your baby boomer parents coddling you and installing a sense that each one of you is “special,” whether that is true or not. This approach to child rearing was a result of them not being shown the level of affection from their parents. Throw in a participatory uncompetitive K-12 education system, when everyone gets a “participation” badge instead of 1st 2nd or 3rd, and have a generation that will get bogged down it its own problems soon enough.
As an HR manager, if I actually find someone under 30 with a work ethic and proven experience, I promote the hell out of them before they can get bogged down by the instant gratification culture of their peers.
I also check out the facebook accounts of younger applicants as to whether they come to table with the maturity and experience required. Luckily, the “look at me” and “show my life in excruciating detail generation loves to post their lives up without any consideration as to who may actually be viewing it, and what its consequence might be. This tactic is essentially a weeding one…
October 27th, 2009 at 1:12 pm
regarding immigration,
all i know is that without immigration, relying on fraser institute theories with its anti immi stuff,,,.. canada will be kicked out of G20 sooner or later.
why is italy part of G7?
immigration, population drive societies
who is going to clean our hotels? hospitals? take care of our elderly today? and who is doing the studying now, going to cure us when we retire and become ill 20yrs from now?
go to any campus in canada today,,take out all the colored people, do a back to the future rewind.. will we be better off or worse off as a society
take off the narrow minded glasses and decide..and see the bigger global picture as canada in the global competitive community
i see vancouver as a edmonton without immigration..
i dont want to live in edmonton.. sushi sucks there
October 27th, 2009 at 1:21 pm
lien on me very clever funny name. I don’t get your point though. Are you saying that any country without promoting immigration will be uncompetitive but then you use Italy as an example? Italy’s economy is far bigger than ours and they don’t rely on immigration. That was sort of a bad point. Northern Italy has one of the highest per capita GDP’s in the world.
October 27th, 2009 at 1:37 pm
#57, What I wrote was that the Canadian Health Officials had FAILED to control the spread of the disease by NEGLECTING to do any any thermal scans , border controls or isolation of the already sick WHILE the diseaese was prominent in MEXICO and while they still had the opportunity to slow the spread of the disease through the community here.
Of course its too late to do any thermal scans now. This procedure was in effect at all Asian airports and health workers came right onto the aircraft and did thermal scans of arriving passengers. Affected travellers and locals who had visited the affected area ( MEXICO) were quarantined in their individual hotels ( entire hotels were locked down) and in special isolation facilities staged away from the hospitals. The H1N1 death count has been negligable in China, HK, Korea and Japan due to the fast action of those governments. Not so here?
Why do you ask? Is because of tourist industry lobbies? Political disputes? ( I watched CTV news today and the MP who expressed a question that Canadians were worried about the ‘unsure stance’ that the government had taken was booed and laughed at by the Conservative bench), why indeed. It furthers my assertion of gross incompetance.
Not being a sheeple type I went to see what was happening in the medical clinics around the city. I went into two. There are long lines of people ( who are making appointments now as there is NO VACCINE AVAILABLE TO WALK INS ) who are genuinely concerned and I would call the number of people lined up here and across the country as a bona fide PANIC. Of course this is all being downplayed by the bi-lingual health care professionals being dolled up in front of the cameras to ‘assure’ Canadians. What rubbish. What incompetance.
reports of healthy people dying are getting in the way of the governments desire to control the message. We have to keep those hotel rooms full don’t we. Thers no reason not to come to Canada is there? By the way did you know we have the Olympics coming? Shhhhhhhhhhhhhhhhh a few deaths are not going to ruin a good party are they?
October 27th, 2009 at 1:52 pm
57
“take off the narrow minded glasses and decide..and see the bigger global picture as canada in the global competitive community”
Sorry, but discussing options other than immigration, is not narrow minded. Falling back on a hyped up system as a panacea for maintaining one’s way of life is narrow minded.
As previously reiterated, and acknowledged by other posters, standards of living can can improve without opening the door up to hundreds of thousands of immigrants each year. Time to tack your PC hat off and start thinking critically….because this discussion will take place on a national level in the coming years as people’s avoidance of discussing it for fear of the having the R card thrown at them diminishes it…
October 27th, 2009 at 1:53 pm
#60 Possibly the reason for Italy having such a high per capita GDP is that they can purchase and produce state of the art machinery with the valuable Euro and that makes for highly skilled , highly trained workers and highly productive work places making much more money than rag factory, rock diggers and fast food restaurant workers and wood mill workers do here in Canada.The low Canadian dollar keeps the country from industrializing and all the unions want to do is preserve the few dinosaur jobs that are left under the massive and expensive subsidy programs that exist for now. Possibly the Italians and the Germans and the rest of the industrialized world is looking towards the future.
The BOC governor Carney has been on the warpath recently against the rising dollar here. Is it because he’s getting heat from the big retailers who see their Christmas season going down the toilet as sales go south for better deals and more selection? Maybe?
But why are you so concerned about paying higher prices? Its better here in isn’t ? The retailers are all American companies anyway aren’t they? Aren’t they getting our dough no matter what side of the border we shop on?
In fact they are concerned, the profit margin for Wall Mart, Cost Co, Retail Chains etc are 30 to 40% higher in Canada for the same items that one can buy in the United States, so why shouldn’t the Canadians keep being overcharged if the big lobby can convince the government to increase their margins by squeezing out the competition? Intersting questions all, but understood by very few. Your government is fucking you, wake up.
October 27th, 2009 at 2:01 pm
59
“take off the narrow minded glasses and decide..and see the bigger global picture as canada in the global competitive community”
Sorry, but discussing options other than immigration, is not narrow minded. Falling back on a hyped up system as a panacea for maintaining one’s way of life is narrow minded.
As previously reiterated, and acknowledged by other posters, standards of living can can improve without opening the door up to hundreds of thousands of immigrants each year. Time to take your PC hat off and start thinking critically….because this discussion will take place on a national level in the coming years as people’s avoidance of discussing it for fear of the having the R card thrown at them diminishes…
October 27th, 2009 at 2:30 pm
@lien on me: Nobody is arguing against all immigration. It needs to be strategic to our economic needs, but not seen as the engine of growth.
October 27th, 2009 at 3:50 pm
Canada is falling like a stone in personal freedoms and prospertiy, health and safety of expectation says Global study out today. Canada has fallen to #31, thats a long way down from #1 isn’t it? How do we rank #31 if we are supposed to a G7 country? How did we fall past even the peripheral G20 nations. Aren’t the papers always bragging about how ‘free’ we are in this country? Apparently , you’re being taken for a ride down the highway of tears.
http://blog.taragana.com/pr/th.....ance-8024/
http://news.yahoo.com/s/nm/200.....rity_index
BTW #63 . I confirmed for myself that the innoculation campaign supposedly ‘rolling out’ the H1N1 ( Mexican flu) vaccine has been nothing more than a sham photo op. Spoke to a doctor myself and was told that vaccine is not available, that it is ‘on order’. The pictures we saw on the TV and in the papers were of a miniscule number of vaccinations done for the cameras people. People are milling around clinics like sheep to the slaughter.
The new response by the government is to have you go home and ‘assess yourself’ using the cardboard flyer directing you to their WEBSITE’ ( Bwahahahahahahahahaha) that they are handing out at the clinics to placate the dumbstruck citizens who are slowing coming to realise that the whole thing is nothing more than a scam that has is trying to create the ‘impression’ that action is being taken while in fact nothing is being done.
What a fiasco. Get your affairs in order if you are in the high risk group. Theres no help for you if you come down with this disease. Oh ya , wonder why they don’t want you coming to the hospital? Because they don’t have ANY ventilators available to keep you breathing once you get there.
October 27th, 2009 at 3:58 pm
actually wikipedia says canadian gdp per capita is higher than italy’s
October 27th, 2009 at 4:03 pm
Another a note to myself so I can check later that http://www.realtor.ca shows 10,643 listings for Vancouver focus area at zoom level 10.
October 27th, 2009 at 4:07 pm
#28
“And for all those condo owners hoping for a swap with the boomers for their homes, you might be waiting a very very long time (perhaps another decade or so). If that is the case, good luck raising your family in your 600k two bedroom condo ‘
Nope, can’t imagine raising any children in a 350 sq ft condo with mortgage and strata fees so high that you can’t feed them properly or afford any extra curicular activities, which is whats going on anyway.
I think a lot of ‘urbanites’ get hit with this reality after their two years of freedom in their ‘downstown lifestyle choice’ and get flushed out to Aldergrove and Mission as soon as she gets pregnant.
This was well documented by Dr. Foote ( Boom Bust Echo fame) who detailed this very phenomena not long ago and called downtown Wank-ouver condos ‘obselete’ because of the ‘unlivabilty’ of the product.
October 27th, 2009 at 4:12 pm
Now our resident troll is posting under a second name, and have a conversation with himself!
October 27th, 2009 at 5:02 pm
“I think a lot of ‘urbanites’ get hit with this reality after their two years of freedom in their ‘downstown lifestyle choice’ and get flushed out to Aldergrove and Mission as soon as she gets pregnant.”
And spend 2+ hours a day commuting plus the gaz expense and the need for a second car. There’s a lifestyle for you. BTW nobody is raising anything in 350 sq ft condos. There’s no such thing as a 350 sq ft condo.
October 27th, 2009 at 5:03 pm
^^ LOL. Indeed.
October 27th, 2009 at 5:19 pm
47 X Vic Says:
October 27th, 2009 at 2:56 am
“I highly doubt we 30+ year olds will live longer by natural causes. We work crazy hours to pay for our mega mortgage. We don’t take time off or vacations…to pay for our mortgage”
Ugh! Sounds just like Japan.
Or, maybe it’s “Offworld” like in “Bladerunner”.
October 27th, 2009 at 5:29 pm
More than half of immigrants who have arrived in the last decade live below the poverty line. It takes an average of 14 years for them to reach median income. The average age of an immigrant is over 40. You do the math.
I live in Singapore which is encouraging a huge number of immigrants. But with mostly private health care, very limited social assistance and very low taxes (first year of business tax free) there is a strong inducement for highly skilled workers and hard working entrepreneurs to come here.
In Canada, the inducement is cheap healthcare and social assistance.
October 27th, 2009 at 5:40 pm
Nice summary Chip. Its a great place to move your family to and have your extended family enjoy the benefits of social assistance, all without ever having contributed a dime.
We really are the land of smiling trusting fools….
October 27th, 2009 at 5:58 pm
#71 U,
I guess when the ol’ knee jerks up high enough to hit you in the face you miss postings like this one from Starving Artist about the condo at the Electra at 329 sq ft.
http://www.6717000.com/mls/V79.....on-st.html
It appears I was being generous when I offered one at 350 Sq ft.
Just because I’m hated exposing the general state of denial in van Shitstain, doesn’t mean I’m wrong. I’ve whipped you with the truth and it hurts I know. Tough titty.It doesn’t mean that the blunt stick ain’t gonna hurt when you wake up to the fact that the media spin has all been a delusion.
bwahahahahahahahahahahahahahahahahahaha , thanks for the laughs though.
Yes, theres an abundance of losers living in shoeboxes that they thought would make them feel like a somebody but have just become traps. Some just can’t look at the reality of their own incompetance…. because it hurtssssssssssssssssss so bad.
Wankers lament,
“Really mommy, I’m a big boy now, snurfle, I own a condo looooook at me , please look at meeeeeeeeeeeeeee !!!!! Can I come vacation with you Mommy?”
October 27th, 2009 at 6:21 pm
Hate to say it, but you got schooled Ultraman by RP…that has got to hurt….
October 27th, 2009 at 7:30 pm
^^ grammar is good
October 27th, 2009 at 8:50 pm
#77 T, I guess you didn’t read the offering by Starving Artist re the sub livable condo offering at the Electra showing Ul that in fact sub 350 sq ft units exist. Where did I get schooled again? Oh sorry, you can’t read. I don’t beat up retarded kids or seniors , so you get a pass.
Are you trying to get a dig in to hurt my feeeeeeeeeeeeeeeeelings. Oh wahhhhhhhhhhhh . did it take an entire session of monkey whacking to dream that up?
I can see it now
wak wak wak Grrrrr I hate realpaul, he tells me things that make me so mad
wak wak wak I ‘ll say bad things
wak wak wak mommy i’m ccccccccccoming mommy.
Look bad spelling and grammer , tell the police that theres a citizen who hasn’t swallowed any kool aid running around spreading uncomfortable information
bwahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!!
keep em coming
As always , bring on the clowns.
October 27th, 2009 at 9:03 pm
Canada’s looming pension problem
=========
Funny nobody complains that this is “off-topic”.
October 27th, 2009 at 10:16 pm
@Anonymous: Read the last paragraph of the post. Lower pension income is relevant to whether or not a boomer will sell his or her primary investment, typically an SFH, and move into, say, a condo.
October 27th, 2009 at 11:38 pm
Frankly after years of observation, I think you’ve all gone insane.
Back in the day the VHB blog gave us all sorts of useful facts and data. Even this blog was useful until Pope abandoned it to the loonies. These days you all sound like various incarnations of Browntown and SatV, just with slightly better grammar.
After 3.5 years of living here I’m finally so tired of the whole real estate obsession that I just can’t stand living here any more. It looks like I might actually have a *gasp* job relevant to my skills in Halifax and that might actually pay a *gasp* wage that will allow me to live a decent life back on the good ol’ east coast.
Sure I’ll miss all the pretentious and crypto-racist Supraboy like assholes on this coast. Sure I’ll be swapping 6 months of moderate cold and a fair amount of snow for rain but at least I’ll be able to afford a nice little place of my own, and the locals will have something more interesting to discuss then FUCKING REAL ESTATE.
I mean Jesus Christ, does *anyone* talk about *anything* else in this town?
See ya later everyone. Best of luck.
October 28th, 2009 at 12:58 am
@scullboy: There will come a point when Vancouver loses its real estate obsession. Sadly, it will only happen after a large part of the population is eviscerated by the market.
God help us, we can’t do it any other way.
Halifax makes Vancouver look like the dump that it is.
Good luck.
October 28th, 2009 at 1:00 am
i taught english in korea, one of the most homogenistic countries in the world,
their birthrate is one of the lowest in the G20,
today their high risk low paying industrial jobs are filled by guest workers from places like sri lanka, india, pakistan and the philipines.
their policy groups are now openly saying they will need to actively accept immigrants if they dont want to become a nation of aging population like japan,
its funny the anti immigrants all come out of the closet when the economy goes through a recession.
i guess they are all busy when times are good.
October 28th, 2009 at 8:51 am
@scullboy:
Too bad, we’ll miss you and your sex baiting of Satv in all his incarnations.
Are you really sure you don’t want to stick around for this moment?
Personally I’m eager to rub it in Dave’s face and I hope he sticks around long enough for that moment
October 28th, 2009 at 9:20 am
84 lien on me
If Korean wants immigrants then why are they all coming to Vancouver. Have you seen North Rd at Burnaby/Coquitlam border and Kingsway Burnaby.
October 28th, 2009 at 9:39 am
@Drachen:
Keep dreaming because that’s all you got. It ain’t going to happen.
October 28th, 2009 at 10:38 am
@Dave: Dave, I noticed that you failed to respond to a question of mine in a previous thread. To repeat, you argued that real estate is affordable in Vancouver. Please define what you mean by “affordability” with respect to real estate.
TIA
October 28th, 2009 at 11:14 am
@wreckanomics:
I agree with you, but whoever said parents were obligated to pay for their kids college or university educations? Mine never did, so I went to the ’school of hard knocks’, and had to learn life the hard way, and I’m still paying for it today at 45. Many people are in the same situation. Want to go to college or university? That’s what student loans are for.
October 28th, 2009 at 11:24 am
@oneangryslav2:
By affordability, I mean the total percent of income required to service real estate debt (mortgage, taxes, upkeep).
For example, the average apartment in Vancouver currently has an affordability rating of 36% (based on average household income, 25% down, 5 year rate and 25year amortization). This compares to an average of 31% since 1985.
October 28th, 2009 at 11:47 am
@Dave:
Yet another fact, logic and mathematical filled post from Dave, wizard of wall street, who has so much money because of his incredible intellect and knowledge of the market that he can spend all day, every day here.
Remember that video in a couple years from now, ’cause that’s going to be me, rubbing it in your face.
October 28th, 2009 at 12:57 pm
What’s next, a clip from Ally McBeal or Sex and the City?
October 28th, 2009 at 1:03 pm
Do you wear high heels when you dance, just like in your dream clip? I’m not sure what Freud would say about this never mind your wife.
October 28th, 2009 at 2:02 pm
Dave you must be quite full of yourself…having been proven wrong so many times and the coming down with this one, that’s just …well… wow.
“For example, the average apartment in Vancouver currently has an affordability rating of 36% (based on average household income, 25% down, 5 year rate and 25year amortization). This compares to an average of 31% since 1985.”
In denial much? Get real man.
October 28th, 2009 at 2:15 pm
@gorky:
Proven wrong? Quite the opposite… I have done quite well with my predictions, thank you. Feel free to read my posts from last Fall. So well that I might have to change my handle to Nostradaveus.
I am quoting REAL published data (as of Sep 2009). Who’s the one in denial?
October 28th, 2009 at 2:36 pm
Dave Dave Dave, when things aren’t going your way you just make a race for the gutter. Try to be civil.
As for your predictions, you are still 0 and 4 with one still hanging in the balance (well, truth be told you lost that one too but before your prediction was proven false you hedged). Yes… You’re about as accurate as Nostradamus (which is to say, not at all).
October 28th, 2009 at 2:40 pm
Dave Says:
October 28th, 2009 at 2:15 pm
Proven wrong? Quite the opposite… I have done quite well with my predictions,
==================
Monday: I predict that I will never die.
Wednesday: Ooo, look. I haven’t died yet. I’m a frickin prediction genius! All hail me!
October 28th, 2009 at 2:45 pm
Drachen, your humour fails you, both in delivery and reception.
Let’s compare predictions…
You… 50%+ drop… calling that for years… RESULT… NADA… Big fat zero
Me…
1. Listings Peak – I was off by only a few hundred listings. The reality is that I called the peak of listings. That opinion was quite divergent from most, including yourself, who claimed that listings would continue to grow.
2. Correction Magnitude – I called the SFH Vancouver bottom at $630k. It ended up hitting bottom at around $650k.
3. Timing of Bottom – In December I said the bottom would be reached WITHIN 6 months. The market turned around 4 months from that prediction.
Sorry, but those are the facts.
October 28th, 2009 at 2:47 pm
@Dave: Thanks for the response. Interesting. 25% down payment? Do you know what percentage of buyers in the last few years has been able to put down a 25% down payment? How would your assessment of affordability change if the down payment were decreased to what has now become standard, at least amongst FTBs–5%? Also, how quickly would affordability be undermined by a 2 or 3 percentage-point increase in mortgage rates?
Finally, despite the massive recent (5-7 year) increase in real estate prices (while income has barely kept up with inflaction during the same period), the affordability index is currently only 5% points higher than the long-term average. What is wrong with this picture? Part of the answer is that if you were to exclude the last 5 years or so, the average since 1985 would be less than 31%, but still does it not seem rather strange that skyrocketing prices and essentially stable incomes have not had a great effect on affordability?
October 28th, 2009 at 3:27 pm
Hey Davey,
Why are you wasting your time arguing with these bearish fools? Get out there and start making boatloads of money on real estate. Get your hands on every last penny out there and leverage yourself to the max. I hear there is an opening at Concert. Since you are a genius, you should get the job, no problem.
@oneangryslav2:
Davey picked 1985 for his reference point in comparison to today. The BOC indicates that average residential mortgage rates in 1985 were about 12%. from ‘85 to ‘90 inflation was between 4% and 5% (4% in ‘85). He has simply substituted high real interest rates in 1985 for high purchase prices (and near zero real interest rates) today. The comparison is bunk.
October 28th, 2009 at 3:28 pm
@Dave:
You… 50%+ drop… calling that for years… RESULT… NADA… Big fat zero
I didn’t predict that it would fall that far until Fall 2011 at the earliest with it being more likely 2012 or 2013.
“1. Listings Peak – I was off by only a few hundred listings. The reality is that I called the peak of listings. That opinion was quite divergent from most, including yourself, who claimed that listings would continue to grow.”
Wrong is wrong, you called a number and you were off. If you’d been 2 listings on your side of the prediction you’d no doubt be crowing about how right you were.
“2. Correction Magnitude – I called the SFH Vancouver bottom at $630k. It ended up hitting bottom at around $650k.”
You also predicted “Not more than 10% off of peak.”
“3. Timing of Bottom – In December I said the bottom would be reached WITHIN 6 months. The market turned around 4 months from that prediction.”
And I predicted that there would be a drop, an upwards correction followed by another drop and possibly ANOTHER upwards correction before the real losses begin. You are not right about bottom until things have settled out for a year or two, every market in the states and most worldwide had the same bounce after the initial drop.
October 28th, 2009 at 3:34 pm
It’s not ‘my’ comparison. It’s data published by RBC. You don’t think a 25 year average is reasonable? That’s the length of an entire mortgage.
It’s strange that you would argue against a standard definition used for affordability. Don’t shoot the messenger.
October 28th, 2009 at 3:37 pm
- Deadcat bounce is my favourite phrase
October 28th, 2009 at 3:38 pm
@Dave:
No, but we can shoot the “entirely uncritical purveyor of RE BS”
October 28th, 2009 at 3:41 pm
@oneangryslav2:
Good question. I think we need to differentiate between ‘been able to’ and ‘did’. With money being so cheap, some people likely keep their down payments low and money invested elsewhere. For the most part, first time buyers are not putting down more than say 10%. Trade up buyers probably exceed 25% for the most part. We should also keep in mind that a huge percentage of homes are owned outright.
Affordability will drop with higher interest rates (by definition). At the same time, higher interest rates imply a stronger economy which implies stronger wage growth. Even with this recession, average income is still climbing and at rates above inflation. I think the two are likely to be a wash going forward.
Have a look at the data. I think it will answer some of your questions.
http://www.rbc.com/economics/market/pdf/house.pdf
October 28th, 2009 at 3:50 pm
@Drachen:
That would be like me saying you were wrong if prices were to correct 49.9%, even though it would be far closer to your original predictions than mine. Talk about splitting hairs.
10% off-peak was the non-recession scenario. In that same post, I said 15% with a recession. Guess what… correct again…
A bottom is a bottom… we hit one. With your dress, lipstick and dancing fantasies, I would expect you to know that.
October 28th, 2009 at 4:01 pm
“That would be like me saying you were wrong if prices were to correct 49.9%, even though it would be far closer to your original predictions than mine. Talk about splitting hairs.”
What are you talking about here? You were wrong period. End of discussion, that you use it as evidence of how good your predictions are just goes to show how deluded you are.
“10% off-peak was the non-recession scenario. In that same post, I said 15% with a recession. Guess what… correct again…”
That’s the hedge I was referring to, originally you just said 10% but then later you revisited your prediction once the recession became inevitable.
“A bottom is a bottom… we hit one. With your dress, lipstick and dancing fantasies, I would expect you to know that.”
Wow, you must have an interesting time at the amusement park. So Lake O’Hara is at the bottom of the Rocky Mountains by your definition? Get serious.
October 28th, 2009 at 4:16 pm
Fly butt monkeys ReMAX man, I think we’ve hit a bottom. Oo-er.
October 28th, 2009 at 4:48 pm
@Drachen:
Sorry, but that isn’t the case. I made the following post three days after I start contributing to this blog:
June 16th, 2008 at 5:21 pm
Freako, put me down for 12 to 18 months of gains. In other words, if there is a correction, then I predict values will drop from 10 to 15% (nominally). So, if it breaks 15%, I will have been wrong.
I will further add that a correction of greater than 10% will only occur due to an external factor (e.g. higher interest rates > 1.5%, higher unemployment ~ + 2%, or a recession)
October 28th, 2009 at 4:53 pm
Ahh well then you probably misspoke or didn’t give all those qualifiers a few times because I definitely remember you giving a flat 10% guess a time or two.
Nevertheless. Is Lake O’Hara at the bottom of the Rocky Mountains? What is a dip and what is an actual “bottom”, I don’t think bottom can be called except in retrospect and it needs a few years to make sure it’s truly settled (in slow moving Real Estate anyhow). Saying “ha ha, see I was right!” in that prediction NOW is grossly premature (I’d wonder about other parts of your life in which you’re premature but I’m trying to keep it civil, at least on my end
).
October 28th, 2009 at 6:05 pm
@Drachen:
Or in other words:
http://www.moonbattery.com/arc....._wound.jpg
October 28th, 2009 at 6:05 pm
Dave enough is enough.
Pretending to be the stupidest contrian alive is funny once but this has gone on too long.
At least when you pretend to be thumbsup or john it was funny
Now go to your room or go upstairs and have mum cook you dinner.
October 29th, 2009 at 11:11 am
#99 OAS, I have been reading interviews by various loans officers that the average downstroke is zero. The new line of credit makes up for the 5% and ‘presto’ a brand new FTB. I have also read that something like 85% of all buyers withing the recent time frame of free money giveaways is 1% away from being underwater in their mortgage.
Canada is desperate to keep the dollar down below the US and is pinning its hopes on a US recovery ( ain’t happening) so that it doesn’t have to raise rates. Aussie and Norway have broken with the pack of the super indebted and have begun to reign in the inflation in real estate and consumer discretionaries ( food etc) but Canada is letting it all slide. Of course this is killing the savers, but who gives a crap about a bunch of old people.
I expect to be paying much more for my bunch of bananas before this is over. The 2% keynsian inspired target that Carney has been blabbing about should double the cost of goods and servives over fifty years . My grocery bill has doubled in the past two. Same for real estate and many issues. Farcical to assume we are going to end this well.
October 29th, 2009 at 1:05 pm
That sounds about right RealPaul, the average stake that a home owner who is insured by the CMHC has in their house is only 6%.