HOW WILL THE BE­QUEST BOOM IM­PACT THE TORONTO MAR­KET?

Annex Post - - COVER STORY -

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.

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