Postpone that panic
As realtors, while we disagree with writer Chris Sorensen’s doomsday prophecy regarding the Canadian housing market (“Crash and burn,” Business, Jan. 14), we want to thank you for the golden opportunity you have provided us with to touch base with all of our clients and allay their fears. We have been inundated with clients calling us to provide them with a current market value of their home, which is a great way for us to reconnect with them at the start of another sales year. We plan to also use the article to cite the positive reasons to invest in rental properties to our investor clients, who are looking for a decent rate of return in this era of abysmally low interest rates and stock-market volatility.
Andrew and Debra Furry, Sales representatives, Re/Max Escarpment Realty Inc., Stoney Creek, Ont.
The big question in Vancouver’s wildly inflated housing market is how much prices are being driven by foreign investors, wealthy new immigrants and “citizens of convenience” who look to Canada simply as a safe haven or convenient source of education and other benefits for their families while maintaining businesses or employment elsewhere. The answer would appear to be “a lot,” for the simple reason that prices have shot far past the point where those who earn a living and pay taxes in Canada, even well-paid professionals or managers, could possibly be purchasing them. Minor annoyances like higher interest rates or tighter borrowing rules have no impact on those who can readily lay down cash for multi-million-dollar houses, so the likelihood of a major correction in Vancouver seems remote.
Ronald McCaig, Port Alberni, B.C.
There you go again, Maclean’s. It was just a year ago that a cover story about real estate scared us with the headline “You’re about to get burned” (Business, March 5, 2012). Granted, as you note, The Economist has now weighed in, saying “the Canadian market is overvalued by 70 per cent.” There are many good reasons for concern. But the conclusion that our home ownership now “feels more like a cinder block tied around our neck” is simplistic and not applicable to many homeowners throughout Canada. Here is hoping for a really soft landing for the affected markets followed by a more positive cover story in January 2014.
Richard Ring, Grimsby, Ont.
As long as people can borrow money, this housing bubble will keep on going. This new generation of first-time home buyers will literally borrow as much as the bank will lend. I’m seeing people living on credit cards with no hope of getting out of debt. At the same time, I’m not seeing factories opening or any industry labour shortages. So while housing values are rocketing up—my house has gone up $100,000 in three years, according to the Municipal Property Assessment Corporation—no one can find good jobs and everyone is deep in debt. This doesn’t add up: the fundamentals are not right for a real estate boom. When those interest rates stop being manipulated down by the central banks, look out.
C.D. Adam, Bowmanville, Ont.
The cover composite picture of the Jan. 14 issue can do without the shadows of the couple, especially the part that represents the raised arm of the lady. The house already has its own shadows made by the sun above; the shadows of the couple suggest a light source coming from down below sideways.
Fuhu Wang, Ottawa
For almost three years running, Maclean’s has hyped an impending crash for the Canadian real estate market. For that reason, the story’s claim that “Canadians [have] essentially spooked themselves” is rather disingenuous. The story’s focus on housing activity correctly pointed to sizeable declines in sales activity compared to levels recorded prior to the most recent changes to mortgage rules, but fails to give any perspective as to how recent sales activity ranks over a broader time span. Sales activity nationally remains well above recessionary lows reached in December 2008 and the post-recessionary low reached in July 2010. While recognition of this may not fit with the story’s slant about a so-called “collapse,” some perspective and context on this would have helped mitigate the story’s lack of balance. Credible housing-market analysts predict a soft landing for the Canadian housing market—characterized by more sustainable levels of sales activity, balanced supply and demand, and stable prices—and they recognize that changes to mortgage regulations are working as intended during what has become an extended period of unusually low interest rates.
Gregory Klump, Chief Economist, Canadian Real Estate Association, Ottawa
People have been predicting this bubble will burst for a decade or more. I guess if you keep predicting it, you will eventually be right.
Robert Wiebe, Richmond, B.C.
Your report on the hideous carnage in Newtown, Conn., (“Newtown’s pain,” International, Jan. 14) reveals something about the perpetrator that many of your readers may not have known: that he “was obsessed,” as your writer puts it, with the violent video war game Call of Duty, an online adolescent revenge fantasy masquerading as a Second World War Allied campaign, where high body counts measure a participant’s skill, but, more ominously, in the mind of a genuine sociopath, measure a participant’s ersatz power and strength.
Richard Orlando, Montreal
Don’t fear the fiscal cliff
It may be a good thing for the U.S. to go over the fiscal cliff (“Over the edge,” Bad News, Jan. 14). This would serve as a wake-up call for the lawmakers. There is clearly a need for their citizens to pay more for some of their services and less to maintain their military. The U.S., the self-declared greatest nation on Earth, does not need to have the most powerful and expensive military in the world to act as the world’s police force. If Americans are not prepared to lower their standard of living soon and to start getting out of debt, their country may self-destruct in the next decade.
Robert Dewar, Calgary
It’ll never be Greek to them
Anybody who compares the fiscal position of the United States to Greece needs to come to grips with basic monetary economics (“Worse than Greece?” Business, Jan. 7). The United States is a currency issuer. It is procedurally impossible for the United States to become insolvent: the theatrics around the deficit ceiling are an entirely political construct. Greece is not a currency issuer. It is beholden to the European Central Bank, and the investors behind this quasi-public institution, if it wants to commit to any counter-cyclical policy. That is why unemployment is 25 per cent in Greece. And why there is now mass emigration from the Baltic countries that are often presented as models for austerity. These are not conditions for long-term growth, but the exact opposite: reasons for why Europe will continue to spiral downwards with the evisceration of income floors and national stabilization policies.
V.M. Short, Toronto
102 stupid things
I always enjoy Maclean’s annual “99 stupid things the government did with your money” (National, Jan. 14). This year, you missed one: our Prime Minster, who seems to think he is either a sultan or royalty, has decided he needs to fly his personal vehicles—plural—with him on foreign trips. Apparently, on his most recent trip to India, he couldn’t arrive at an official function in anything but a limousine and, likewise, he needed to have his own SUV to venture outside the palace gates. Really? He could not find a car to rent? He spent half a million dollars to take two cars to India because the RCMP said he should.
Jerry Storie, Brandon, Man.
Why is the federal government spending $1.28 billion to clean up harmless low-level radioactive waste (LLRW) in Port Hope, Ont., when director general Patsy Thompson of the Canadian Nuclear Safety Commission said “no adverse health effects have occurred, or are they likely to occur, in Port Hope as a result of the operations of the nuclear industry in the town”? Why do the cleanup when 150 to 200 trucks per day will be hauling LLRW on the confined streets of Port Hope, which will be a real safety and health risk to residents, as the trucks spew their toxic diesel fumes into the air?
Bill Tuer, Cobourg, Ont.
Here’s another “stupid thing” for your list: the majority of St. John’s city council voted to give the St. John’s Port Authority $500,000 to build a new fence around our harbour, which Transport Canada has admitted is not required.
Anna Penney, St. John’s, Nfld.
Don’t take this sitting down
Your article “Don’t just sit there” (Society, Jan. 14) calls attention to recent studies regarding the health dangers of excessive sitting. Man’s natural instinct is to move about frequently. Indeed, this natural instinct is particularly suppressed by soft chairs and bucket seats, the design of which desensitizes us to innate signals designed by nature to take care of our bodies. This mechanism, dormant in many of us, can be reactivated through proper training. In the first instance, however, we should avoid seating that encourages slouching. Teachers in the school system should also be encouraged to allow their classes occasional breaks to walk about the classroom in order to maintain proper body performance and function.
Meir Cohen-Nehemia, Founder and Director, Mitzvah Technique Centre, Toronto
So sitting is bad for us. Any more doomsday scenarios attributed to everyday living? Since I have a good deal of skepticism after the yo-yo-ing of learned studies about coffee, eggs, red wine and a host of other things first being all bad for me, then later reversed to being beneficial in moderate quantities, I will not plan on standing all day. Meanwhile, I will no longer begrudge the thoughtless young people for not giving up their seat on the bus for an old person; they are obviously expressing concern about how bad sitting is for the life expectancy of the elder.
George Zador, Victoria