“At age 56, they have a net worth of $1.2 million. That’s good. But 96% of it is in one asset – real estate – which in their city (Victoria) is dropping like a stone. “It’s so scary now,” says Irene, “that I have no idea if we can even sell these places, let alone for what the assessment says they’re worth.”
He was a fireman for the full thirty. She still works, but aches to retire. Both are mid-fifties and when she hangs up the clipboard as manager at a small courier company, they’ll be living on his pension of $3,800 a month.
“Not enough,” Irene says. “I wanna travel.” But that’s not going to happen, unless they give up their entire financial plan – which involves owning two side-by-side houses. The one they live in is worth seven hundred. The one they rent out (for peanuts) is worth five. And the sum total of all RSPs, TFSAs and cash stuffed in the orange guy’s shorts is less than $50,000.”
– story relayed by Garth Turner, greaterfool.ca, 29 Aug 2011.
Read the whole article, in which Garth also notes:
– “A 50% decline in that market over the next five years is entirely possible.”
– “Less than 1% of Canadians have a million dollars outside of their homes. But about 50% of all the people living in Vancouver have $1 million in their homes – at least for now.”
– “According to a new survey, half of the population can’t save even $25 a week.”
Bobby adds [30 Aug 2011 1:38am] – “Certainly lots of properties for sale here in Victoria. I see clusters of For Sale signs. I was up to Bear Mountain the other day and there was huge number of homes for sale. Certainly a buyers market.”
Kilby adds [30 Aug 2011 1:01am] – “Victoria (including Victoria West) August 23 to 29th. 797 active listings, 23 new sales.” [so MOI about 8 -ed.]
“A poll of Canadians aged 45 to 64 conducted by Environics Research for TD Waterhouse was even more mind-boggling: 32 per cent said they expected a lottery win to support them post-retirement—versus 34 per cent who said they had retirement savings plans with actual dollars in them.”
– Macleans, 8 Mar 2011 [hat-tip SophieZombie]
Access to adequate saved retirement funds is relatively uncommon.
Canadians are overdependent on RE for their retirement plans, moreso in Vancouver.
Boomers are going to be trying to cash in their RE lotto tickets; this process has already commenced.
There will not be enough buyers for them to realize their thus-far-paper gains.
Imagining a lotto win is not a million miles from banking on a big RE pay-out.
RE in Vancouver is two to three times overvalued; prices will drop 50%-66% peak to trough.