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July 12, 2016 | The Dander

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Well, there ya go. Serves me right. I should have known better than to accept a CBC invite to do a live, hour-long phone-in Q&A session on home ownership, then flip over for a media web chat on the same subject with the same crew of celery-eaters.


Actually, it was amusing. As I sat in the booth in the corp’s downtown Toronto castle, listening on my headphones to callers emote about how riskless and wonderful residential real estate in Toronto is, I watched myself being flamed in the Twittersphere on my phone. Things were already going badly as I tried to convince a 26-year-old without any money he’s an idiot for buying a 350-square-foot, $270,000 packing crate ($780 a foot) for him and his GF to live in, when Susan called.

After announcing she has an MBA, she said her two financial advisors had been wrong in advising her (she sounded like a retiree) not to buy a Toronto house six years ago. Now, she bragged, it had advanced in value from $600,000 to $900,000. So there. Garth’s an idiot. Young people everywhere should follow her on this path to wealth. And did she mention she has an MBA?

Well, as you might imagine, my arguments were mute. Nobody actually cares if we have a borrowing overload, if mortgage rates have bottomed, if kids are mindlessly trading mobility for debtdom, if the Bank of Mom’s dangerously increasing family exposure to one inflated asset, if the economy is barely moving ahead or if buying a one-bedroom condo doubles the cost of renting one.

The topic was,’ have you given up on home ownership?’ It was aimed at the moister crowd. And, no, they haven’t. So expect a lot of Millennial real estate road kill in the years ahead.

But back to Susan. Congrats, I said. So, are you gonna crystallize that gain? Because it’s just illusory at the moment, the product of a bubble market that could go down as fast as it swelled. Of course, she said no. “I don’t need it.†And she got a little louder, which is apparently when I became a #sexist, #mysogenist, patronizing, anti-#womenmatter, insulting, #tooarrogantforCBC and #dinosauratttitude old dude.

Hey, I said to the caller, “don’t get your hair in a dander.â€



Sexist? And here I thought hair was, well, hair. I’m basically covered in it. Does it mean I was dissing my own sex? So confusing.

Anyway, the bias of the show, the producer, the host and the callers was simple. Buying a house is safe. It is risk-free. The sooner you do it, the better. Renters are fools, throwing away their money. And simply because everybody is desperate to own a house, real estate will go up. Probably forever. Garth’s an idiot.

Lost in the noise is any sense of financial balance. The young typically buy houses with 100% of the money they have, and take on epic debt at the same time. They feel real estate’s a right, not a privilege and therefore are pissed and disenfranchised when it’s unattainable. The financial illiteracy rampant in our society has resulted in this one-asset strategy among people who have zero knowledge of investing or taxes, and no plan.

That’s cool. Lately they’ve lucked out in an inflated market caused by interest rate suppression and free-range hormones. But this will not remain. And then I can guarantee the CBC will want nothing to do with me. Hell, we’re there already.


Let’s finish this off with a note from Brittany, another young’un who sees nothing but gains ahead. In Winnipeg, no less. Perhaps you can assist me in answering. I’m on my way to court-ordered therapy.

I just came across your blog and I am hooked. My husband and I have been trying to decide for the last year if we should buy a house or not. We live in Saskatoon, in our late 20s, recently finished university,  and we earning about 120K combined and have managed to save about $80K for a down payment on a home. This money has just been sitting in our TFSAs doing basically nothing. We have enough to put down 20% on a 400K house which is a nice house in Saskatoon that we could live in for at least 5+ years, but we would have nothing left for savings. Should we just put down 10% instead of 20%, or maybe opt for a smaller home? But then we would likely outgrow that home before the 5 years. We currently rent a 3 bedroom bungalow, everything included for $1200. We could see ourselves being happy renting for another couple years, but are worried we have wasted so much already on rent instead of paying off equity. Like many others, we are faced with harsh criticism from our family and friends about our concerns regarding the current market. Thanks in advance, Garth!

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July 12th, 2016

Posted In: The Greater Fool

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