HOW WILL THE BEQUEST BOOM IMPACT THE TORONTO MARKET?
THE REALTOR, MICHAEL KALLES: In the next 10 years, there’s $750 billion to be transferred from this generation to the next, which is the greatest transfer of wealth in the history of our country, and a lot of these people will not be affected by the interest rates. THE FINANCE ACE, JOE OLIVER: The cautionary note regarding these comments about the biggest transfer of wealth in Canadian history is, when governments hear that, and particularly a government that is into higher taxes and deficit spending, my concern is if they get in again, we’re gonna see a succession duty. THE ECONOMIST, BENJAMIN TAL: Now, the focus is on people in their 60s, 70s, transferring money to their kids. I’m actually focusing on people in their 80s, 90s, transferring money to the 60s, yeah? That’s $250 billion. It’s happening over the next five to seven years. Now, given the fact that those baby boomers that will be receiving the money are already relatively comfortable, they have a big house, this probably will skip a generation. It’s already happening. The rate at which parents help kids is at a record high, and it’s rising. So that’s another dimension of the mystery of how people can afford. By the way, money is going to money, which is unfortunate. In our study, we are seeing that most of the people that receive the money, have money. THE BUILDER, PAUL MIKLAS: So you’ve got this transfer of wealth going to the kids, you’ve got this influx of foreigners coming in, and you have these young entrepreneurs. How do you see a recession coming down the line in two to three years? TAL: I cannot see it now. We probably will be the longest expansion ever. One of the reasons is because of the fact that interest rates are not rising. Usually what you have is the labour market is strong, wages are rising, inflation goes up, interest rates go up, and then the economy goes down: to the extent that you have a monetary policy error in which central banks raise interest rates too quickly, as we have seen in 2004 with Greenspan in the U.S. So it can happen, and I’m saying if it happens and prices go down, I’m a buyer.