Retirement Lotto – “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.”

“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,, 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.
– vreaa

56 responses to “Retirement Lotto – “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.”

  1. Heres a financial plan if they are stressed for retirement. Sell both and move to a small town in the interior. Invest the savings. Retire. Travel. Garden.

    • The interior? 95% of GVRD-ers have never even set foot there. They think that it’s all moose, rednecks, and trees. Let them keep their opinions.

      (Most folks here in the Interior, interestingly, have been to the GVRD and would rather not live there. We know that Vancouver is all faux-riche, latte-sipping, “cultured,” long-distance commuters. And we don’t want anything of that.)

    • They’re not GVRD, they’re in Victoria. But yeah, they could easily move up-island, to the north, to the interior, or to another province and retire handily. (Just as GVRD-ers are often ignorant about the interior, people from the interior often seem to forget the province is bigger than just GVRD and interior – I’d prefer living in the North Coast or Sunshine Coast or North Island to most of the interior.)

      And it’s hard to sympathize with people when “only” half of a couple can retire at 56 with a generous pension. I expect that for my generation the standard retirement age will be 70. The couple in the article actually have quite a number of options, they just have to make a few hard decisions. They could also sell the rental house, at a reduced price as implied by the article, and invest the proceeds elsewhere and/or use some of the value to tide them over until the wife’s pension kicks in. So even if they refuse to leave their primary residence they can play for almost a DECADE before the normal retirement age.

  2. It is very very sad. There is no happy ending in all this. Just those with the guts to save themselves and get out early.

  3. Boo f-ing hoo. Why is it always the public servants with $4k/month pensions that cry about how scared they are?
    Since when are we entitled to a flush retirement at 56? These idiots will have at least $5500/month in pensions (nicely split into a overall tax rate of barely 22%) by the time they are 65!

  4. Well, as one ‘enterprising’ NorthShore restaurant patron contemplating his GoldenYears recently demonstrated – there’s clearly more than one way to secure a publicly funded ‘assisted living’ place for yourself…

    [CBC] – Man robs gas station to pay restaurant bill

    “A man who couldn’t pay his bill at a North Vancouver restaurant told staff he was going to rob a nearby gas station to get the cash — then was arrested after doing the deed and returning to settle his tab.”…

  5. “Canadians deluded about becoming debt-free” latest headline from the CBC

    Who is to blame for all this debt? The central bank, the big banks, the people who borrowed the money, the elites of this country, the politicians. Lack of historical memory of past events? Human nature? The very structure of the financial system?

    I for one lean more towards “The very structure of the financial system” how about you?

    • I blame the loaded gun that was pointed at my head when I took on a 40% GDSR loan in an inflated market. No… wait… there was no gun.

      [lol -ed.]

      • It’s called “qualitative analysis”… but really, it’s a BlackArt, this morning’s obligatory QuantumFoamSurfingSession reveals that the PhaseTransition to TotalFarce is well apace, and gathering momentum… [Nem’s ‘alternate universe’ LeaderRewrites appear parenthetically below the actual headlines]…


        [MotherJones] – A Privately Owned Nuclear Weapons Plant in…Kansas City?

        {“ShowMe” State Property Developer GoesNuclear!}

        “In Kansas City, Missouri, a local zoning fight is going nuclear, literally: A Monday-morning courtroom showdown between activists and politicians could determine whether the city becomes host to the world’s first privately owned nuclear weapons plant.” [Note to All: actually, the distinction of “world’s first privately owned nuclear weapons plant” goes to the UK’s Aldermaston Laboratories – which now belongs to a consortium including prime equity partner, The Carlyle Group]

        And while we’re on the subject of the proper role of ‘private enterprise’ in providing ‘public goods’…

        [PrivateEye] – PF-IRE ENGINE TROUBLE

        [Note to Ian: ‘not trying hard enough’ – should have run under, “We Was Hosed!”]

        “THREE of London’s fire engines were damaged badly enough during the rioting they had to be taken off the road. But that’s nothing compared to the damage the fire fleet’s massively indebted venture capitalist owners could do, with creditors poised to start “stripping lucrative assets from fire stations”. That’s the doomsday prediction of MPs examining the imminent financial collapse of AssetCo, a company with debts of at least £140m. The clear-out of fire service assets could take place in London and Lincolnshire”…

      • “stripping lucrative assets from fire stations”

        I think they mean “stripping lucrative assets from FIRE nations”

  6. what’s a better scenario…buy a Vancouver home, sell when your equity is worth 1.2M and move to retirement location with free and clear home, car, boat, vacation home?
    Or, never buy Vancouver home, move to your entire life location, start taking on mortgage and debt here, never own vacation home, be debt free 15 years after Vancouver home owner?
    I’m torn on which one is more advantageous. Can someone help me here?

  7. “A Vancouver home costs $1.2M.
    If you ‘buy’ it, you owe [$1.2M – (whatever equity you have already)].
    Where is the advantage in ‘buying’ a Vancouver home”?

    if you buy a 1.2M home and put it on the market the day you take possession you owe 1.2M. Chances are better than not that any seller of a 1.2M home today has at least 50% equity.

  8. no, I’m saying you should have bought a lottery ticket when the jackpot was 1M. The jackpot is now much much less.

  9. “32 per cent said they expected a lottery win to support them post-retirement”

    Rusty, is that you?

  10. if you call buying several Vancouver homes as the lottery ticket than yes, that is me

  11. Is the purchase of those homes contigent on you buying the time machine?

    I suspect it is.

  12. pricedoutfornow

    “The jackpot is now much much less.”
    Why is it less now? I thought real estate in Vancouver will continue to increase by leaps and bounds for the rest of our lives? Doesn’t matter what house I buy, guaranteed there will be a huge profit there when I go to sell?

  13. The jackpot is less because prices are higher. Trolling 101. Can’t change the past so let’s remind y’all to rue what coulda been instead. Cuz h8ers gonna h8.

  14. Rusty, you forgot your alternative advice.
    “Just go and buy Apple stock 10 years ago……dummy”

    To summarize, Rusty’s advice is to just go out and spend enough money on something that will be worth $1.2million more than it is worth now at some point in the future after you buy it. Easy peasy!

  15. That pension will cost us $3800 x 12 = $45600
    Until death, assuming no spousal continuity = guess 25 years
    = $1,240,000 in today’s dollars
    Add in the cost of benefits that go with it. probably $5000 a year
    That’s another $125,000
    Add in the pension they will both get at 65 until death probably $600,000+
    That’s a lot of future liability- nearly $2 million in Today’s dollars.
    Forget healthcare costs etc.

    • Agreed. This couple is set.

      Garth painting a picture that a 30 year public servant with a (likely) fully indexed pension, a $700,000 personal residence (we don’t know the mortgage situation, probably minimal), and a rental (probably more leveraged), is somehow doomed is ridiculous.

      He wants to retire at 56 and likely has the assets to do it.

      And then the crowd here jumps up and down that this example somehow proves Vancouver will collapse and all home owners are fiscal morons? What?

      So far their have been plenty of buyers for those wanting to cash in their very real paper gains. Today. If not their is always the reverse-mortgage.

      Talk about drinking kool-aid.

      Pensioned retirements are going the way of the Do-do bird. That much I get. The tax payers have massive liabilities against this guy and his wife. They should be mocked for their privileged attitudes. And Garth should be shunned for the huckster that he is.

      • Sure, these guys aren’t going to starve.
        But listen to what the lady says: “It’s so scary now”; “Not enough”; (and, even though in her mid-50s, she “aches to retire“).
        The point is this is all about unrealistic expectations.
        This couple is illustrative of the much broader problem.

        People have imagined futures for themselves based on the current market price of their RE holdings, and expected future price strength. We are suggesting that those projections will prove to be very unrealistic.

        When a westside couple’s home drops from greater than $3M market value to less than $1.5M, they’ll still be relatively wealthy by Canadian and global standards, but compared with their own anticipated financial trajectories, they’ll feel like relative paupers.

      • He’s not a “huckster”, Blammo…

        Far from it. GT’sjust suffers from occasional ‘ontological entrapment. Or, if you prefer, is ‘blinkered’ by the SouthernOntario, AuthenticBoomer, Scion ‘O Privilege thang… &, for what it’s worth [no allusions to BuffaloSpringield] GT’s ‘writerly voice’ is, sometimes, farfar harsher than his BonaFide persona (based on surreptious/expert surveillance @ assorted public fora). his wife is, like, SoHot. Ergo, cain’t be AllBad.

        Acquired taste, perhaps.

        I put it all down to excessive proximity to Harpo&TheC’s. More radioactive than the FukishmaPrecinct, you know.

        PS – admonished him earlier today in FullPublicView for his churlish retort to a well intentioned BlogDog’s remark. He was, I believe, properly humbled – as any Man ‘O Literature would have been. I pulled a ‘Dickens’ on him, courtesty of Alistair Sims.

  16. Its official vancouver is no longer the best place on earth. Vancouver no longer world’s most livable city

    • OMG! OMG!! OMG!!!

    • Reading between the lines: chances are next year will likely see a further drop in the rankings for Vancouver with both Toronto (4) and Calgary (5) coming in ahead of Vancouver at a fraction of the cost for a SFH. No wonder so many folks are leaving.

  17. if you listen to Garth, might as might as well quit your day job and sell his books for a living.

    • Humans evolved a certain way because of some thing called “rational instinct”. To put it layman’s terms, “it makes sense”, or to put it in more simpler terms for you and your side-kick Rusty to understand, “if you see smoke, think of fire”.

      Now associate Van RE with..a million dollars shack in a city with nothing much to offer in economic fundamentals except a good looking tourist flyer where the average income is $83K . This is the smoke.
      Do I have to spell “fire” for you ???

      Fred and Rusty
      Your posts are childish and laughable.

  18. yes, too many schmucks on this site drinking Garth koolaid

  19. We always cite sources, and we get a fair number of anecdotes from comments at Garth’s site, and from stories embedded in Garth’s commentary. We agree with a fair amount of what he says, but not all of it.
    We share his concerns about RE being overpriced, needless to say.

    To suggest that those of us commenting here today about Canadian debt, or about over-reliance on overpriced RE, are doing so because we’re unduly influenced by Garth or anybody else, is to trivialize the issue and to attempt to deflect the debate.
    We note that Rusty ‘n Fred have quite bit to say, but little about the crux of the matter: the massive debt train coming down the tracks.

    • They make such a lovely couple… ChortleChortle. Cui bono? Damn… more grey matter detaching from the ceiling (it’s quite sticky, actually). 😉

  20. They’ll be living on his pension of $3,800 a month. “Not enough,” Irene says. “I wanna travel.”

    As an avid traveler, I can assure them that $3,800 is loads of money for traveling.

  21. haveanotherround

    Month-end is upon us. Any bets on how our kind and gentle REBGV folk will hype the slowing activity at the high end? REBGV can spin a better tale than our Nemesis. Headlines on median prices perhaps (averages do distort the numbers after all), talk of summer beach activity keeping people away, plus the old chestnut of moving toward a buyer’s market. I can barely wait to see the headline.

    The only thing more irritating than REBGV press releases is listening to (or reading) comments from local sub-prime borrowers over-loaded on CMHC-guaranteed debt crowing about how astute they are for buying real estate. Even if the melt-down causes Canadian Armageddon and turns our city into a crime-ridden wasteland, I reckon part of me will really enjoy not having to listen to such infuriatingly smug buffoons condescend on real estate matters.

  22. Spoiled f’ing baby boomers living in Victoria – “it’s so scary being millionaires with a gov’t pension and living in the mildest climate in Canada”. “Suck it up for Christ’s sake or if it makes you feel better just think about the other 99% of the population that will retire to zero pension and poverty and still have to shovel snow from their sidewalk at age 80. People forget that demographics explains half of everything including the real estate bubble.

    • Great comment. Not to mention being 56 to top it off. British Columbia is a huge exception to everything which is Canadian. Ppl who where born n raised there have no clue how good they have it compared to the rest of the entire Country!

  23. Still, the reality is if this family didn’t amass savings outside the pension except their houses they are facing reduced income and they have to figure out what to cut.

    Obviously any other investment is off the table or they would be selling.

    Oh and one other thing that may come into play — increased nervousness associated with aging. Nothing wrong with this — it’s a natural thing — but it might start affecting markets going forward.

    • Can’t they just sell their investment property by listing at the current market price (not some wild expecatation of ever increasing prices in a world of declining wages, fewer jobs, and debt deflation) and shut-up. That’s what the rest of we grown-ups do.

  24. This article makes me sick …. Esp the last 2 paragraphs.

  25. assuming no mortgage payment on their place, $3,800 pension is plenty to live on for a couple every month. by the way, how the heck did Garth know 50% off the next five years? heck, he has been advocating selling and renting for the past 10 years.
    Hurry, run to the store and buy his books. I called it another master bs.

  26. If you live in Calgary, he has been right for the last five years.

    Just sayin’.

  27. Yikes, the aftermath ‘o an injudicious surfeit ‘o Shiraz n’ BabyBacks… in no particular order [and disaggregated into four posts to bypass links restrictions]… an entertaining exercise in ‘dot-connecting’/pattern recognition….

    [Bloomberg] – Wealthy Use Auctions to Sell Mansions After Price Cuts Fail

    “The market has changed,” he said. “I asked too much, as we all do. I hung on for a long time. But this is it. It’s time to move on.” – Andrew Osinski, 67, a former managing director of the global asset management division of Lehman Brothers Holdings Inc

    [BusinessWeek] – Grandma Bunks With Jobless Kids as Multigenerational Homes Surge

    “In this economy people have to live together.” – Veronica Garcia, Norwalk, CA Social Services Director.

    • [Reuters] – Some U.S. firms paid more to CEOs than taxes: study

      “Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study said on Wednesday. It also found many of the companies spent more on lobbying than they did on taxes.”…

      [FT] – Poverty crisis in US gambling paradise

      Please respect’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email to buy additional rights or use this link to reference the article –

      “Las Vegas has gone from having the lowest unemployment in the nation at 4 per cent to the highest,” says Brian Burton, president of Three Square, the Nevada-based non-profit food bank. “We are number one in foreclosures, number one in bankruptcies, number one in unemployment [and] we have 300,000 people that are worried about where their next meal is going to come from.”

    • [Reuters] – Some U.S. firms paid more to CEOs than taxes: study

      “Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study said on Wednesday. It also found many of the companies spent more on lobbying than they did on taxes.”…

      [FT] – Poverty crisis in US gambling paradise

      “Las Vegas has gone from having the lowest unemployment in the nation at 4 per cent to the highest,” says Brian Burton, president of Three Square, the Nevada-based non-profit food bank. “We are number one in foreclosures, number one in bankruptcies, number one in unemployment [and] we have 300,000 people that are worried about where their next meal is going to come from.”

    • [WSJ] – Tying Health Problems to Rise in Home Foreclosures . {note to Ed: economics as epidemiology}

      “New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.”…

      [AlterNet] – ‘Workampers’: What It’s Like to Wander Around the Country in an RV Desperately Looking for Work

      ““I can’t anticipate retiring, since there’s no retirement income. The RV is home until it isn’t. We would never buy another house, since we wouldn’t want to lose it. But we’re managing. It is a true day-at-a-time lifestyle.” There are 25 million unemployed and underemployed deciding what they will do next to find a job. Workamping is not the road chosen by most jobless, but for the Ellingsworths and thousands of others it is, for now, the only available road.”…

    • Last up… two ‘modal adaptions’ to anomic strain from Blighty… one is obviously preferable to the other… yet both are clearly emblematic of the consequences [unintended or otherwise] of HardTimes and inappropriate policy responses…

      [UK Guardian] – Suffolk legal chief took own life after intense pressure over council cuts

      [BBC] – London stripper teacher reprimanded: A male teacher who moonlighted as a stripper has been found guilty of unacceptable professional conduct but left free to continue teaching.

      PS – to All, re: that last link; it’s why, after a valiant but all too brief stint practicing the SocraticMethod in some of London’s ‘harder’ hoods… Nem ‘chucked it in’. Forget about the marking/paper work… it was the after-hours pole dancing that finally finished me.

  28. retiring at 56 and living on a pension of $3,800 a month ? where do I apply for his job ?

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