Weekend Reading: Out Of Control Real Estate Edition

Toronto home prices soared a record 33 percent from a year ago, pushing the cost of an average home to $916,000 and a detached home in the downtown to almost $1.6 million. Now policymakers in the city of Toronto and province of Ontario are considering a new tax on foreign buyers or a tariff on vacant homes to help cool speculation.

But the real problem is that record low interest rates have fuelled unprecedented growth in housing, which happens to be amplified in Vancouver and Toronto:

Bank of Canada Governor Stephen Poloz disagrees that low interest rates are to blame for soaring home prices in Vancouver and Toronto.

“No, when you’re borrowing money to buy a house and you think you’re going to make 20 per cent over the next year, I don’t think it’s going to make a difference if the interest rate you’re paying is 2 per cent, 4 per cent or 6 per cent,” he said.

This week Maclean’s featured an in-depth look at how Canada has completely lost its mind over real estate and why there is no turning back. Here are 5 signs Canada has real estate mania:

This Week’s Recap:

On Monday I highlighted Scotia iTRADE’s new sustainable investing tool aimed at the socially conscious direct investor.

On Wednesday Marie added to her new ‘Building Your Wealth’ series with a look at employee stock purchase plans.

And on Friday Marie wrote about the cathartic process of decluttering your home.

Over on Rewards Cards Canada I shared the news that Chase Canada has closed its popular Amazon.ca Rewards Visa card to new applicants. This card’s valuable feature was that it did not charge extra fees on purchases made in foreign currencies. Most credit card issuers charge a 2.5 percent fee to convert your purchases back to Canadian dollars.

Weekend Reading:

A former U.K. bank CEO says Canada’s big banks should scrap sales targets for their employees and focus on customer service.

Canada’s banks are facing increased increased oversight in wake of the recent CBC Go Public reports, but the primary financial consumer watchdog (FCAC) lacks the firepower to hold the banks accountable:

“One consequence of the tight budget is that the FCAC has not carried out a “mystery shopper” exercise since 2005.”

Don’t worry, mom’s money is safe with an “advisor”. Fee-only advisor Graham Bodel explains why the ‘advisor vs. adviser’ argument is a red herring.

How can you boost your financial acumen? Here’s how to improve your finance skills, even if you hate numbers.

John Heinzl explains why dividend payout ratios don’t have to be so perplexing.

Can index investing become to big? With indexing making up less than 5 percent of the global market, Vanguard CEO Bill McNabb explains why we have a long way to go before even having these discussions. “Most of the arguments are inane and completely unsubstantiated from a data standpoint.”

Interesting story from Andrew Hallam on why he sold his $400,000 stake in Berkshire Hathaway.

Barry Ritholtz explains why your brain wasn’t built to handle reality.

Would you rather have $1 million or $5,000 monthly in retirement? Your answer will tell you whether you suffer an ‘illusion of wealth’ or ‘illusion of poverty’.

I love this: Can your money rules fit on an index card? Real people share what’s working – and not working – for them.

Learn about a five-stage retirement and more books you need to read before retirement.

A fascinating read from a blogger who retired at 52 and shares 10 things he didn’t expect in early retirement.

Mark Seed from My Own Advisor is on a similar path to financial independence and he shares his bucket approach to earning income in retirement.

Or, and, if. Des Odjick says these are the three magic words for your budget.

Preet Banerjee explains why the rise of longer car loans poses a serious risk to our household finances.

Finally, not personal finance related but The Globe’s Dave McGinn shared his inspirational journey to lose weight and get in better shape.

Have a great weekend, everyone!

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1 Comment

  1. J. Money on April 11, 2017 at 5:25 am

    Thanks for passing on the good word! See you at FinCon this year? 🙂

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