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It's also important to note that yoy % increase continues to decrease. April was 13%, May was 13%, June was 8%, July was 6%, Aug was 6%, September is 5% over last year. As last year was an anomaly with prices continuing to escalate over the normally slow winter months, I would expect this to continue and for us to be around 0% yoy by late November and hit negative by January. An even more accurate barometer is the median sales price - a lot of higher end homes were sold last month which really skews the average. The median number which was up 13% in May is now only up 4%.

In addition, the ytd sales continues to decrease vs last year and I would expect that by the end of the year we will have fewer houses sold in 2010 than in 2009.

To update myself, while the average is still a 5% yoy increase (actually it's 4.7%) - the median is now only up 2.5% - another drop of 1.5% yoy. We are also only 1% up in total sales, so it seems a pretty forgone conclusion that the above will happen and 2010 will be lower total sales than 2009. The average price is steady because - again - we saw more higher priced properties selling (double the number of condos in C02 - which have average prices of $850ish vs Sep for eg.)

It's also important to note that in the C01 area, the s/l ratio is hovering around 26.5% - this is buyers territory and has been for a few months.

Also, also, even with prices lower than in the spring the % listing price is now around 98% - vs typical 100% in the spring of 2010.

Active listings are up 24% yoy and days on the market are 31 vs 26 or a 19% increase.

So, active listings are up, days to sell are up, number of listings are up, % listing price is down, median price yoy continues to drop, average price yoy continues to drop. I'm not sure how many more ways there are to say that this doesn't bode well...unless you're a realtor (like the one I just saw from the beaches) who is saying that sales are down because there just aren't enough listings - unbelievably irresponsible spin.
 
To update myself, while the average is still a 5% yoy increase (actually it's 4.7%) - the median is now only up 2.5% - another drop of 1.5% yoy. We are also only 1% up in total sales, so it seems a pretty forgone conclusion that the above will happen and 2010 will be lower total sales than 2009. The average price is steady because - again - we saw more higher priced properties selling (double the number of condos in C02 - which have average prices of $850ish vs Sep for eg.)

It's also important to note that in the C01 area, the s/l ratio is hovering around 26.5% - this is buyers territory and has been for a few months.

Also, also, even with prices lower than in the spring the % listing price is now around 98% - vs typical 100% in the spring of 2010.

Active listings are up 24% yoy and days on the market are 31 vs 26 or a 19% increase.

So, active listings are up, days to sell are up, number of listings are up, % listing price is down, median price yoy continues to drop, average price yoy continues to drop. I'm not sure how many more ways there are to say that this doesn't bode well...unless you're a realtor (like the one I just saw from the beaches) who is saying that sales are down because there just aren't enough listings - unbelievably irresponsible spin.

thanks Simuls for that excellent analysis and update. Puts all the numbers clearly in perspective. Other than spin, no one can think that things are going well.

I suspect as well that if the high end luxury is selling better than last year, the mid range is getting hit even more than we appreciate. I guess that is somewhat reflected in your median number. I believe the entry level is likely less hit than the mid range.
Only someone with blinders objectively looking at this data could draw a different conclusion than you have arrived at.
Please continue if it is not too much work for you to do this monthly because seeing all these numbers is helpful to me and I am sure to many others on the site.
 
... unless you're a realtor (like the one I just saw from the beaches) who is saying that sales are down because there just aren't enough listings - unbelievably irresponsible spin.


perhaps they meant there just aren't enough listings that are ready-to-move-in and priced appropriately at 10% below asking.

what i've seen are 'desireable' properties still asking December 2009-May 2010 prices,
or complete fixer-uppers that require at least $150-200K asking $500K in so-so areas.
 
Nearly 83,000 immigrants arrived in Toronto During 2009 ... [/url]

Toronto condo completions are about 15,000 units a year
Indeed. After various factors, that's a net growth of about 75,000 to 80,000. (natural increase is offset, and then some, by negative interprovincial migration)

15,000 units at 1.7 per = 28000
about 10,000 detached at 3.6 per = 36000

Found accomodation for about 64,000. That's a bit of a shortfall, but not huge.

There were an abnormally l ow number of starts last year, there were about 10,000 fewer starts in 09 than in 08 for example.

At 18,000 of each type per year that's capacity for 95,000 per year, which is overbuilt so there was backed up inventory available in '09. At the time Alberta was booming and net interprovincial migration was quite a bit stronger as a demographic factor. In fact the oversupply was probably somewhat higher as the ratio was skewed towards detached with its larger household size for a while.

How much "shadow inventory" is actually sitting on the market? Judging by the number of lights on in a few new condos in my area vs older devoted rentals, it's very substantial.
 
Indeed. After various factors, that's a net growth of about 75,000 to 80,000. (natural increase is offset, and then some, by negative interprovincial migration)

15,000 units at 1.7 per = 28000
about 10,000 detached at 3.6 per = 36000

Found accomodation for about 64,000. That's a bit of a shortfall, but not huge.

There were an abnormally l ow number of starts last year, there were about 10,000 fewer starts in 09 than in 08 for example.

At 18,000 of each type per year that's capacity for 95,000 per year, which is overbuilt so there was backed up inventory available in '09. At the time Alberta was booming and net interprovincial migration was quite a bit stronger as a demographic factor. In fact the oversupply was probably somewhat higher as the ratio was skewed towards detached with its larger household size for a while.

How much "shadow inventory" is actually sitting on the market? Judging by the number of lights on in a few new condos in my area vs older devoted rentals, it's very substantial.



Lafard, what area are you talking about. I am assuming downtown Toronto.
Do you believe that people are trying to rent out all those empty units or do you think it is that people with a different mentality abroad are just parking their money. I ask this since it is my understanding that at least in areas like China "new is better than used" and therefore people sit on empty units with the idea that they will make more money watching the escalation than in fact renting out. I don't believe that to be the case in Canada but perhaps the concept is a foreign one to someone not here and one tends to go with what one knows (though you would hope that the agents advising them here would inform them of this important difference.)
Is there another explanation or thought you or others have to explain the "few lights".
I can tell you that in Florida it is definately something I have noticed the past few years but then there has been a huge bust down there.
 
Nearly 83,000 immigrants arrived in Toronto During 2009 - Citizen and Immigration Canada
http://www.cic.gc.ca/english/resources/statistics/facts2009/permanent/11.asp

This is a very misleading statistic because it doesn't necessarily have to do with immigration. All it tells you is how many permanent and temporary residents exist in the Toronto area at any one time - NOT how many moved here in any given year. My girlfriend has been here for three years and is a permanent resident and will remain so for several more, so although she is only 1 person - she would be counted in each and every year.

According to the 2006 census, Toronto's population was 2 503 281, but is growing at a rate of only 1% a year - this is a much more useful statistic. Put in numbers, that means that there will only be an additional 25 000 people in the city of Toronto each year. For the GTA the number is closer to 100 000/year, but over the next 20 years for both Toronto and the GTA those yearly increases will drop substantially with Toronto increasing at an anticipated rate of only 7000/year from 2011-2031 and the GTA by 60 000/year from 2011-2031.

I think it's also important to note that the vast majority of population growth over the next decade will not be in the city of Toronto (estimated at only .2% annually), but will be in the surrounding areas - areas that are not currently being condo-ized to the extent the downtown core is.

I'm pointing this out because these immigration numbers get tossed around like a salve to soothe the nervous real estate masses, but I really think that people are intelligent enough to take the good news with the bad news - we need to stop spinning it to suit our needs - especially when RE is the largest investment (potential) most people ever make.

In summation, Toronto will need LESS new housing over the NEXT 20 years than it did over the LAST 20 years. This is something to keep in mind when we discuss a potential bubble and how we will emerge from it.

http://www.toronto.ca/torontoplan/pdf/flash_sec2.pdf
 
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Point 1:
I believe you have misquoted me: I said it becomes less affordable for seniors to live on their own. THere is a definate schism between have and have nots. You are talking about a select part of the population. As seniors live longer and longer, there is concern they will outlive their money. Same issue for the baby boomers.

Yes, I understand the baby boomers are the "richest generation" and there will be a "huge transfer of wealth" but the reality is that many boomers have not saved anywhere near enough for their retirement. I would suggest that Foresthill and Rosedale is hardly a cross section of the greater economy nor even the City of Toronto itself. You have taken as your base point the wealthiest communities in Toronto and I believe this results in distortion of the conclusions.

There is an interesting article today in the NY times about how the wealthy have flourished in the US with the downturn and before and how the middle class is becoming more and more poor. However, the wealthy are perhaps 5-10% of the population depending on how you wish to define it and to suggest that this 5-10% is the rule rather than the exception I think is a far stretch.

The trouble for alot of elderly is even though they are "wealthier" they are house poor. They have pensions if they are lucky that they received 10-20 years ago that have not kept up with inflation. They did not get salaries anywhere near the figure of $150,000/year and therefore their pensions are far less. What about all those elderly "income refugees" without pensions who saved even a million dollars and are looking at 4% returns and are scared to be in the stock market because the million was 1.5 million 2 years ago. They may have a million or more $ home but don't have the income to support the taxes or the upkeep.

Again I am not saying everyone but your extrapolation I don't believe is accurate for even the majority.

As for the second point: Thank you for your insight. This makes some sense but surely you would agree if you concur that the quality of jobs out there is lower, this does not bode well for continued price increases.

I would be itnerested to see how that will impact things. Let's go from a top down approach on stats if people are being squeezed as much as folks in the states:

- According to Stats Can (National Income and Expendirture accounts and National Balance Sheet Accounts) On average, Canadians have 5x more assets than debts. Crazy eh...couldn't believe it, but thats why credit is flowing in Canada. Assets have been growing faster than debts (of course a lot of assets were eroded in recent stock losses so a larger percentage is tied up in real estate)
- People In arrears in mortgages in below 0.5%
- Mortgage payments as a percentage of disposoable income per worker is 35%
-Effective Mortgage rates (average rate of all mortgages according to stat can) is 4% in 2010 (despite the Bank Rate being far below that, most Canadians are choosing long term rates)


If Canadians don't take on more debt...we are not any more squeezed than previous generations.

Do you mean seniors being wealthy and cash poor vs house poor?


Second point is a something that should be monitored. Toronto jobs are heavy in construction (interest rate sensitive in an era of Quantitative Easing) and Manufacturing (sensitive to dollar and competition to BRIC). This means that job growth is not poised to be great...and we may lose workers to Alberta and Northern Ontario which are based on commodities.
 
the full report:

For a more upscale home, Canadian boomers plan to downsize
TD Canada Trust Boomer Buyers Report shows 56% still have a mortgage

TORONTO, Ontario, October 28, 2010 — For their next move, Canadian boomers are looking to downsize to smaller homes. According to the TD Canada Trust Boomer Buyers Report, four-in-five Canadian boomers say their next move will be to a smaller home, either to save money (46%) or to enjoy more luxurious features (34%).

"Many boomers find that their needs and priorities have changed since they moved into their current home. If you find you have more room than you need, consider 'right-sizing,'" says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. "Moving to a smaller home can allow you to free up assets to put towards your retirement savings or enjoy in other ways."

Retiring with a mortgage?

Three-quarters of boomers say it is important that they pay off their mortgage before they retire, but less than half (44%) have paid off their entire mortgage. Of those boomers with a mortgage, one-third have paid off more than 60%, but one-quarter have a long way to go, having paid off less than 25% of their mortgage.

Haque offers this advice for boomers working to pay off their mortgage: "Talk to an expert about your home financing - you could pay off your mortgage faster with a different payment schedule, such as increasing your mortgage payment frequency from monthly to biweekly."

Boomers prefer detached homes:

For their next home, the majority of boomers (61%) plan to purchase a detached house. Although condos come in as second choice at 24%, more than half say they are at least considering a condo because they involve less maintenance (84%) and offer better security (54%) and amenities such as a gym or pool (47%). The top reasons that most boomers prefer houses over condos are that they prefer to have a backyard and garden (61%) and don't want to pay condo fees (57%).

However, some boomers say they will stay put. Forty-nine per cent will not move, either because they want to avoid the hassle of moving (61%), because their house is already the right size for them (43%) or they like having extra rooms for guests to visit (28%).

Boomers heading South:

Nine per cent of boomers currently own a vacation property and a further 12% plan to buy one for their retirement.

More than a third of boomers are considering buying a property south of the border. One quarter say opportunities created by the depressed real estate market have sparked their interest, while another 12% were already considering real estate opportunities in the United States. The most important criteria for buying a vacation property include location (99%), price (98%), low maintenance (95%), and the ability to have friends/family visit (92%).

"It is essential to talk with a qualified mortgage advisor if you are considering a property purchase in a different country," says Haque. "While there can certainly be opportunities, it is important to consider lending rules and taxes. An expert can help walk you through the paperwork and decide whether a property in another country really is an affordable option."

About the TD Canada Trust Boomer Buyers Report

Results for the TD Canada Trust Boomer Buyers Report were collected through a custom online survey conducted by Environics Research Group. A total of 1,000 completed surveys were collected between Sept. 30-Oct. 9, 2010. All participants were screened to have been born between 1946-1964 ("Baby Boomers"). This is the third report in a series on the life stages of Canadian home buyers. It follows the first time home buyers report and the repeat home buyers report.

News source: TD Bank Financial Group


-According to CAAMP and Will Dunning Inc (who had a much bigger sample size that the 1000 person survey of TD)

-Average equity stake for Canadian households is 74%
-52% of Canadians own their home outright
-Among the remaining that don't own their own outright 2/3rds have 52% equity


Boomers have so much equity they have eclipsed first time buyers as percentage of sales in the market (moving up).
 
Indeed. After various factors, that's a net growth of about 75,000 to 80,000. (natural increase is offset, and then some, by negative interprovincial migration)

15,000 units at 1.7 per = 28000
about 10,000 detached at 3.6 per = 36000

Found accomodation for about 64,000. That's a bit of a shortfall, but not huge.

There were an abnormally l ow number of starts last year, there were about 10,000 fewer starts in 09 than in 08 for example.

At 18,000 of each type per year that's capacity for 95,000 per year, which is overbuilt so there was backed up inventory available in '09. At the time Alberta was booming and net interprovincial migration was quite a bit stronger as a demographic factor. In fact the oversupply was probably somewhat higher as the ratio was skewed towards detached with its larger household size for a while.

How much "shadow inventory" is actually sitting on the market? Judging by the number of lights on in a few new condos in my area vs older devoted rentals, it's very substantial.

I think people mistake the term shadow inventory. To me, shadow inventory means units that are not owned (i.e. Forclosed on). Most of the empty units in buildings that are begining to occupy should have more than 20% equity in them by actual buyers. Back in late 80's early 90s we had a bad job loss recesion, detached homes still affordable for most, and lots of units were built on spec by builders
 
I thought I read somewhere that around 75% of seniors are broke? How the average Canadian upon retiring has only $15k or so in savings?

I think BP is talking about condo investors--wealthy folk. They only rep a tiny per cent of the pop, and I think he's starting to wonder if every condo investor is tapped out and waiting for price corrections back to reality?

Judging by the new immigrants I'm meeting, their typical goal is a)get a job b)work their asses off and save for a downpayment c)they are looking to buy a townhouse or detached in the 'burbs or outer 416 with their wife, often from back home) d)they want kids to be born in Canada as it makes it easier for their (grand)parent's to immigrate... e)they want space and f)they want to be part of their (name ethnic/religious background here) community.

Condos are bought by investors, not your average new Canadian. So of those 83,000 immigrants, maybe only 1000 buy condos within 5 years, 10,000 buy homes and the rest either rent or being kids of immigrants, obviously don't buy homes...

I can see Immigrants moving to other Areas of the GTA that have more affordable housing, the price gap between resale and pre-con is too wide in the core. In the end, I think for the pre-con market we'll see higher commisions, more incentives and prices coming down to resale (eg ONNI West lake was under $400psf with parking and locker - Cheaper than resale) but no signs of a collapse because of high inventory.
 
This is a very misleading statistic because it doesn't necessarily have to do with immigration. All it tells you is how many permanent and temporary residents exist in the Toronto area at any one time - NOT how many moved here in any given year. My girlfriend has been here for three years and is a permanent resident and will remain so for several more, so although she is only 1 person - she would be counted in each and every year.

According to the 2006 census, Toronto's population was 2 503 281, but is growing at a rate of only 1% a year - this is a much more useful statistic. Put in numbers, that means that there will only be an additional 25 000 people in the city of Toronto each year. For the GTA the number is closer to 100 000/year, but over the next 20 years for both Toronto and the GTA those yearly increases will drop substantially with Toronto increasing at an anticipated rate of only 7000/year from 2011-2031 and the GTA by 60 000/year from 2011-2031.

I think it's also important to note that the vast majority of population growth over the next decade will not be in the city of Toronto (estimated at only .2% annually), but will be in the surrounding areas - areas that are not currently being condo-ized to the extent the downtown core is.

I'm pointing this out because these immigration numbers get tossed around like a salve to soothe the nervous real estate masses, but I really think that people are intelligent enough to take the good news with the bad news - we need to stop spinning it to suit our needs - especially when RE is the largest investment (potential) most people ever make.

In summation, Toronto will need LESS new housing over the NEXT 20 years than it did over the LAST 20 years. This is something to keep in mind when we discuss a potential bubble and how we will emerge from it.

http://www.toronto.ca/torontoplan/pdf/flash_sec2.pdf

Interesting, Toronto you feel needs less housing? This goes against most analysts, demographers and expert that studys the Golden Horseshoe. I'll take my chances. I buy for cashflow within an hours drive from downtown.
 
Well Brian, you have been busy responding to everyone.

I will try and respond to some of your points. Bear in mind my primary task is not real estate so I am not emmersed in it as you are and so do not have the fine point details of all the data.
Canadians have 5x more assets than liabilities. I would venture that the majority of those assets are in their home in $ terms. As well, I would also bet that this is grossly distorted by the 10% at the top who probably have10-20x more with another25% with 2 x assets and probably 50+% with assets if any restricted to the equity in their home. Again, this is just conjecture.
People in arrears of their mortgage: I think this is very unfair at 0.5%. You should mention that last year it was 0.15% so it has tripled. Yes it is a low number still and not worrisome but things definately not going in the right direction. However, we agree we will not see upside down mortgages likely or to a significant degree in Canada.
Effective mortgage rates of 4%. That is good that people are choosing 5 year fixed terms. However I would suggest to you that it is precisely because they feel they cannot afford the bump up. Better off people would likely opt for the variable since if financially solid they can offset the increase. Alternatively, they feel interest rates are going to go up much more shortly and approach the historical norms (around 6%). Either scenario means a further squeeze.

total debt loads are now 150% of income in Canada, the Highest they have ever been. I don't immediate access to the data but I am sure that someone here will post it for you. And remember they are financing this with the lowest interest rates in history. Government is interfering because if they did not, the economy would collapse or at least that is the fear. If they were not intervening, interest rates would balloon and then how well will everyone fair? And they unfortunately continue to intervene because the recovery is less than stellar. I do not view these as positives. Just because the near term at artificial low rates means people ( and therefore R/E) is being supported is not a reason to believe that "all is well".

I meant with my Senior's comment that there is marked skewing. Some Sr.'s are wealthy. In fact very wealthy. However, I believe they would skew the data markedly. For 1 very wealthy Sr. there are likely many who are barely subsisting. I believe it what Exx who quoted the TD study about 75% at the poverty line. Yes alot of Sr. are rich because of the paid off value of their home. My point is "reverse Mortgages" are being offered for just this reason. As I said before, the example of Foresthill and Rosedale is indicative of likely the top 5% of society, not the norm or even the median. I would hazard a bet that 75% of seniors in this present environment have difficulty making ends meet and further that were it not that the majority (at least those who I have met ) have lived through very trying times and had and still have a very different attitude than baby boomers (to the saving grace of alot of boomers who have lived to the full extent of what they can afford to carry as opposed to what they can afford to own) and therefore the elder know how to tighten their belts and live frugally. As well, people: even rich people live a certain life style and don't feel a need I would believe to always get the latest of everything. Even if one has a $100,000/yr retirement and they lived frugally before on say $50,000 they will still spend $50,000 and accumulate. And Brian, despite perhaps the population you were referring to, most elders I believe are probably existing on $35000/yr or less. Again I don't have stats but I don't believe my postulations are out to lunch.
Again I would welcome objective data.

I meant that alot of Sr. are house poor. As well, they are cash flow poor due to the low interest rate environment. For those who retired and did not have the benefit of a "defined benefit program" even if they were diligent and maxed out their RRSP's, you need to recall that limits in the 70's were $2000/yr and then $3500/yr. It was in the 80's at some point that everyone woke up to the fact that unless RRSP limits were raised significantly people could not afford to retire. This works OK for the boomers if they maxed out and invested well but the time of low rates for the older people meant they could not get massive RRSP's. I would guess that $500,000 would be a very sizeable RRSP for most SR's and today they can get $20,000. Add old age and CPP and you are looking at $35000. Hardly massive after you pay taxes. Yes, they have a $500,000 home but all expenses are rising and their incomes falling.

In the 70's when inflation was high, those with money got alot on their RRSP's. When they retired, their RRSP's had grown. Now it is the opposite
with stock prices barely above where they were 10 years ago due to the tech wreck and the 2008 "readjustment" though recently there has been considerable catchup. Those retired in the 70's and early 80's could get alot in interest on their RRSP and despite high inflation were not as affected as they were not buying alot of articles. My point is the situation for most seniors now (unless they have a defined benefit program) have a much harder time as the revenue source has decreased tremendously and alot are and have been touching their capital to live.

Toronto jobs have been heavy in construction and we agree. That said, the whole point of this discussion is that alot of us believe there has been overbuilding again and from other conversations in which I believe you may agree there are a number of projects to come on line which some of us expect will be shelved. Certainly there have been boom times for construction and the trend will likely be down going forward not up as far as construction jobs go.

My final point. The only way interest rates can stay this low is if the economy does not do well and governments continue to print money with resultant devaluation of the currency. Eventually this had better end otherwise the likely result that everyone is so scared of is a Japanese style lost decade. Look over there and you will see that real estate is 1/2 or less from its peak, the Japanese stock Nikkei is 30% from its 40000 peak.
I do not believe that one can look at real estate in isolation.
One has to look at the global picture to get a better appreciation (even if I agree that all R/E is ultimately local).

Forgive the long winded answer.
 
Well Brian, you have been busy responding to everyone.

I will try and respond to some of your points. Bear in mind my primary task is not real estate so I am not emmersed in it as you are and so do not have the fine point details of all the data.
Canadians have 5x more assets than liabilities. I would venture that the majority of those assets are in their home in $ terms. As well, I would also bet that this is grossly distorted by the 10% at the top who probably have10-20x more with another25% with 2 x assets and probably 50+% with assets if any restricted to the equity in their home. Again, this is just conjecture.
People in arrears of their mortgage: I think this is very unfair at 0.5%. You should mention that last year it was 0.15% so it has tripled. Yes it is a low number still and not worrisome but things definately not going in the right direction. However, we agree we will not see upside down mortgages likely or to a significant degree in Canada.
Effective mortgage rates of 4%. That is good that people are choosing 5 year fixed terms. However I would suggest to you that it is precisely because they feel they cannot afford the bump up. Better off people would likely opt for the variable since if financially solid they can offset the increase. Alternatively, they feel interest rates are going to go up much more shortly and approach the historical norms (around 6%). Either scenario means a further squeeze.

total debt loads are now 150% of income in Canada, the Highest they have ever been. I don't immediate access to the data but I am sure that someone here will post it for you. And remember they are financing this with the lowest interest rates in history. Government is interfering because if they did not, the economy would collapse or at least that is the fear. If they were not intervening, interest rates would balloon and then how well will everyone fair? And they unfortunately continue to intervene because the recovery is less than stellar. I do not view these as positives. Just because the near term at artificial low rates means people ( and therefore R/E) is being supported is not a reason to believe that "all is well".

I meant with my Senior's comment that there is marked skewing. Some Sr.'s are wealthy. In fact very wealthy. However, I believe they would skew the data markedly. For 1 very wealthy Sr. there are likely many who are barely subsisting. I believe it what Exx who quoted the TD study about 75% at the poverty line. Yes alot of Sr. are rich because of the paid off value of their home. My point is "reverse Mortgages" are being offered for just this reason. As I said before, the example of Foresthill and Rosedale is indicative of likely the top 5% of society, not the norm or even the median. I would hazard a bet that 75% of seniors in this present environment have difficulty making ends meet and further that were it not that the majority (at least those who I have met ) have lived through very trying times and had and still have a very different attitude than baby boomers (to the saving grace of alot of boomers who have lived to the full extent of what they can afford to carry as opposed to what they can afford to own) and therefore the elder know how to tighten their belts and live frugally. As well, people: even rich people live a certain life style and don't feel a need I would believe to always get the latest of everything. Even if one has a $100,000/yr retirement and they lived frugally before on say $50,000 they will still spend $50,000 and accumulate. And Brian, despite perhaps the population you were referring to, most elders I believe are probably existing on $35000/yr or less. Again I don't have stats but I don't believe my postulations are out to lunch.
Again I would welcome objective data.

I meant that alot of Sr. are house poor. As well, they are cash flow poor due to the low interest rate environment. For those who retired and did not have the benefit of a "defined benefit program" even if they were diligent and maxed out their RRSP's, you need to recall that limits in the 70's were $2000/yr and then $3500/yr. It was in the 80's at some point that everyone woke up to the fact that unless RRSP limits were raised significantly people could not afford to retire. This works OK for the boomers if they maxed out and invested well but the time of low rates for the older people meant they could not get massive RRSP's. I would guess that $500,000 would be a very sizeable RRSP for most SR's and today they can get $20,000. Add old age and CPP and you are looking at $35000. Hardly massive after you pay taxes. Yes, they have a $500,000 home but all expenses are rising and their incomes falling.

In the 70's when inflation was high, those with money got alot on their RRSP's. When they retired, their RRSP's had grown. Now it is the opposite
with stock prices barely above where they were 10 years ago due to the tech wreck and the 2008 "readjustment" though recently there has been considerable catchup. Those retired in the 70's and early 80's could get alot in interest on their RRSP and despite high inflation were not as affected as they were not buying alot of articles. My point is the situation for most seniors now (unless they have a defined benefit program) have a much harder time as the revenue source has decreased tremendously and alot are and have been touching their capital to live.

Toronto jobs have been heavy in construction and we agree. That said, the whole point of this discussion is that alot of us believe there has been overbuilding again and from other conversations in which I believe you may agree there are a number of projects to come on line which some of us expect will be shelved. Certainly there have been boom times for construction and the trend will likely be down going forward not up as far as construction jobs go.

My final point. The only way interest rates can stay this low is if the economy does not do well and governments continue to print money with resultant devaluation of the currency. Eventually this had better end otherwise the likely result that everyone is so scared of is a Japanese style lost decade. Look over there and you will see that real estate is 1/2 or less from its peak, the Japanese stock Nikkei is 30% from its 40000 peak.
I do not believe that one can look at real estate in isolation.
One has to look at the global picture to get a better appreciation (even if I agree that all R/E is ultimately local).

Forgive the long winded answer.

I appreciate the thoughtful response...so many points where do I start

- Debt loads are a concern...but we a country that is at still under historical TDS and GDS ratios with lots of assets
-the effective debt interest rates on mortgages and consumer debt haven't fallen as fast as the bank rate, so I doubt the validity of the assumption that people are just getting by with low rates and once rates go back up the country will collapse. I hope people/banks manage credit...unless the New World Order wants to control everything we do by making us slaves to credit.
- CAAMP did an interesting study to stress test Canadians with an interest rate going back to pre-reccession levels http://www.caamp.org/meloncms/media/CAAMP Winter Report Black_2.pdf You should read it.
-Mortgages in arrears will go up during job losses, hopefully the jobs gains forecasted will continue to bring that 0.5% to under 0.15% (a rounding error)
- I don't think retiring seniors at the poverty line will cause the Toronto real estate market to collapse
- Toronto is still a real diverse economy and it almost as as much head office jobs than Calgary, Edmonton and Vancouver and Montreal combined. Will we have the job growth as strong as what's poised out west...definitely not, but will there be another collapse in the real estate market because of weaker future prospects no. Toronto RE just won't increase...as much...
 
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I hope you are right Brian.

I am clearly in the camp that feels we will have a correction. I have not expected nor posted that I believe we will have a crash but I do believe we will retest 2007-2008 prices. I hope you are correct and that we just stabilize or drift downwards slightly for a few years and start our upward climb.

I will try and read your CAAMP study when I have some time. The US with QE is clearly trying to devalue its currency further. Already today we are almost at parity (99.80 when I last looked) and this means again pain for our manufacturing and exporting segments which have alot of difficulty coping with a par dollar, let alone if the US continues its downward trends and our goods get more expensive to the US consumer as the US consumer continues with his extended budgets.

Anyhow, I guess we will have to wait at least another 6 months to have a clearer direction and even then I am not sure things will be obvious. Clearly QE by making more money available, giving confidence to the stock market (TSX is up 2% as we speak) makes people feel wealthier and perception is often "reality" until perception can no longer hide under the guise of reality.
 

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