Eighty and employed
By Emma Teitel - Wednesday, November 30, 2011 - 0 Comments
A new survey finds Americans think they’ll be working longer than ever before
As the economy and markets have generally gone south over the past few years, it’s become clear to many boomers that retirement may not be quite as golden as they’d once planned. In fact, some new research suggests it may not happen at all.
According to a recent survey by U.S. bank Wells Fargo & Co., Americans think they’ll be working longer than ever before. Roughly 76 per cent of respondents (1,500 Americans, aged 26-75, were surveyed) said they would rather make a set amount of money before retiring, compared to just 20 per cent who said they’ll retire when they reach a certain age, regardless of savings. How long will it take to reach their target? A quarter of respondents say they expect to work into their 80s.
That’s a mentality not so far removed from the Canadian one: a recent Royal Bank of Canada poll shows that 72 per cent of Canadians hope to be mortgage-free by age 65, while a third of Canadians over 55 currently have 16 or more years still left on their mortgage term. “Canadians want to be mortgage-free as they approach retirement age and beyond,” says Claude DeMone, director for Home Equity Financing at RBC, “but the reality is that it takes prudent planning and the right advice to stay on track.”
-
The crushing recession that’s brought Ireland to its knees
By Nancy Macdonald - Wednesday, November 17, 2010 at 10:00 AM - 1 Comment
With 14 per cent unemployment and its banks on the brink, the Celtic Tiger is now more like a sickly kitten
One in three Irish under 30 are out of work | Cathal McNaughton/Reuters
Two years ago, Mick Doherty was tooling around Dublin in a brand new, cherry-red Audi A4. “A six-speed,” the young Irishman adds, with a rueful smile. Today, Doherty drives around his adopted Vancouver in a 1990 Chrysler Daytona—automatic transmission. “And I’m grateful for it,” declares the 32-year-old construction worker who, last year, emigrated to Canada to escape a crushing recession that’s brought his native Ireland to its knees. It’s shrunk the economy by a tenth—the textbook definition of a depression.
What a difference a few years can make. As recently as 2006, the roaring Celtic Tiger was held up as a model economy. Doherty was making money hand over fist, holidaying three times a year, in Bulgaria, Las Vegas, Spain. Ireland famously boasted more BMWs per capita than Germany, and its lawyers and managers were earning bigger bucks than their counterparts in the U.S. But in late September 2008, Irish banks, overexposed to the property market, came under severe pressure as the credit crunch bit in. “More or less overnight,” says Doherty, “everything came crashing to a halt.” Ireland led Europe into recession.
-
Awash in a sea of debt
By Jason Kirby - Tuesday, February 2, 2010 at 9:00 AM - 46 Comments
Oblivious to the risks, Canadians are piling on record debt loads
Room 32 of the B.C. Supreme Court in Vancouver is where dreams of owning a home go to die. It’s the main foreclosure court in the Lower Mainland, where banks and other lenders ultimately turn when homeowners can’t keep up with their mortgage payments. The homes get seized, then sold off. “There are many tears on that carpet,” says Andrew Bury, a partner at Gowlings and the top foreclosure lawyer in the city. But lately the cramped courtroom has come to represent something else entirely—the utter insanity of Canada’s red hot housing market.
Last week Bury was in court to seek approval for the sale of a one-storey foreclosed home in central Richmond for $670,000. That was already $40,000 more than the house had been valued at two months earlier. Then, as he always does, Bury asked whether any other bidders were interested in the 2,000-sq.-foot home. Ten hands shot up. What happened next left him stunned. After a secret auction, the winning couple offered a whopping $852,500. “That’s an extreme case, but it’s the kind of thing we’re seeing all the time now,” says Bury. “It’s a feeding frenzy out there.” -
The shocking truth about the value of your home
By Duncan Hood - Monday, February 23, 2009 at 6:50 PM - 238 Comments
New evidence shows that Canadian prices could go down, and stay down, for a decade
There are still people out there who don’t believe Canada is about to be hit by a devastating housing crisis, but Riaz Kassam isn’t one of them. For him, the crisis has already arrived.
Last July, he made an $80,000 pre-sale payment on a $1.5-million penthouse condominium in Vancouver’s tony H&H Yaletown building, just a few blocks away from where he lives. Kassam, a 42-year-old computer analyst, who’s married with no kids, expected to move in by the end of 2008. But when he put his current apartment on the market, he didn’t get a single offer. He thought maybe he had priced it a little high, so he knocked a bit off. Still, no offers. He lowered it again, and again, until eventually he was offering his apartment for a full $120,000 less than his initial asking price. That’s when he realized he was in trouble. “We reached the point where we couldn’t drop the price any more,” he says, “or we wouldn’t have enough for the down payment on the new property.”
-
No subprime crisis here? Not so fast . . .
By Colin Campbell - Friday, October 24, 2008 at 12:00 AM - 1 Comment
Xceed is dumping mortgages, but not because of missed payments
It’s often said that Canada doesn’t have a subprime mortgage problem, but there’s mounting evidence that’s no longer true.
Until this week, Canadians could easily get no-money-down, 40-year mortgages backed by the government. Subprime loans with no government insurance, typically given to those with poor credit histories, represented about four per cent of the industry. That sounds small, but it still represents hundreds of thousands of now potentially overextended homeowners. Adding to the problem is the fact that mortgage lenders themselves are now facing a severe credit crunch.
One of Canada’s largest subprime lenders, Xceed Mortgage Corp., announced last month it was “entirely shifting away” from what it calls “non-traditional” mortgages. Like other high-risk lenders, it backed its risky mortgages with commercial paper, a market that’s now completely frozen. Xceed’s shares, which hit a high of $4 last year, are now worth about 90 cents, and it has told some clients in Ontario it will not renew their mortgages—even though they’ve never missed a payment.
That’s what happened to Rick Lafleur, whose 900-sq.-foot bungalow was taken over and sold by Xceed. He’s now organizing a class action lawsuit against the company for dumping him. “I know there are a lot of other people in the same boat,” he says.
Robert McLister, a mortgage planner who writes the Canadian Mortgage Trends blog, says cutting off subprime mortgage holders will have consequences. “Will it cause excess [housing] supply to hit the market? That’s yet to be seen.” No one is predicting the hurricane of foreclosures that hit the States, but there will be rough weather. “It’s happening here,” says Lafleur. “Maybe not on a scale like in the U.S., but it’s still happening.”
