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T 6- The Oakville Beaver W eekend, Saturday March 25, 2006 Commentaiy The Oakville Beaver 467 Speers Rd,, Oakville Ont. L6K 3S4 (905) 845-3824 Fax: 337-5567 Classified Advertising: 845-3824, ext. 224 Circulation: 845-9742 The Oakville Beaver is a member of the Ontario Press Council. The council is located at 80 Gould St., Suite 206, Toronto, Ont, M5B 2M7. Phone (416) 340-1981. Advertising is accepted on the condition that, in the event of a typographical error, that portion of advertising space occupied by the erroneous item, together with a reasonable allowance for signature, will not be charged for, but the balance of the advertisement will be paid for at the applicable rate. The publisher reserves the right to categorize advertisements or decline. Editorial and advertising content of the Oakville Beaver is protected by copyright Unauthorized use is prohibited. IAN OLIVER Publisher NEIL OLIVER Associate Publisher JILL DAVIS Editor in Chief KELLY MONTAGUE Advertising Director CHARLENE HALL Director of Distribution TERI CASAS Business Manager MANUEL GARCIA Production Manager RIZIERO VERTOLLI Photography Director RODJERRED Managing Editor Strapping News, Mississauga Business Times, Mississauga News, Napanee Guide, Newmarket/Aurora Era-Banner, Northumberland News, North York Mirror, Oakville Beaver, Oakville Shopping News, O ldtm ers Hockey News, Orillia Today, Oshawa/Whitby/Ctarington Port Perry This Week, Owen Sound Tribune, Palmerston Observer, Peterborough This Week, Picton County Guide, Richmond Hill/Thomhill/Vaughan Liberal, Scarborough Mirror, Stouffville/Uxbridge Tribune, Forever Young, City of Y a k Guardian Rating the value of real estate Garth Turner Halton MP TV vo major topics this week: First, thanks to everyone who took the time to respond to my call for input into the coming Conservative budget. My report to Finance Minister Jim Flaherty is in its final stages.Thank you Halton. You gave me a ton of great ideas to work with. It is definitely time, as I said in the election, that middle class issues were on the agenda in Ottawa. Yeah, finally. Second: Let me share with you some thoughts on ,the value of real estate in Halton, across the GTA and beyond. I met in my riding office a few days ago with Peter Vukanovich, head of Oakville-based Genworth Financial, the country?s second-largest mortgage insurer. The company has just become the first in Canada to insure 35-year mortgages, responding to marketplace demand. So, what might this mean? Simply, this: Mortgages have always been very large debts for people to pay, and in order to make them more affordable, the payments have been spread over a long period of time -- usually 25 years. The effe c ts this is that monthly payments are brought down, but the amount you end tip paying back rises. At today's interest rates, with a 25-year term, you actually pay the lender about twice what you bor rowed -- almost $580,000 in payments on a $300,000 mortgage. So, when the payment period is extended, then the same formula kicks in, name ly, lower monthly payments and a greater amount actually repaid. In the case of that $300,000 mortgage and a 35-year amortization, monthly payments fall from $2,000 a month to about $1,700, but the amount you dish over rises by $135,000, to a sub stantial $712,000. So, does this mean the real estate market has peaked and is about to hit the down escalator? Not exactly, but this is the third major indicator housing prices may have passed the ability of the average family to afford them. First we have had the unprecedented use of the five per cent downpayment pro gram. Vukanovich told me about the tens of billions of dollars in mortgages his company has just insured for buyers in that program -- in fact, this is where almost all of the mortgage growth is. Buyers putting up five per cent of the price of a home and mortgaging 95 per cent are doing the same things as stock market players snapping up securities on margin. But if housing prices move in the opposite direc tion, their tiny little bit of equity can evaporate. The second indication was the announcement some months ago that several of the banks would lend money to people who don't have any -- hence, the zero-down mortgage. Borrowers with good strong employment earnings, but no savings, sud denly qualified to buy Houses they could not afford. So, here we have the third indicator -- amortizations which have gone from 25 years to 30, then to 35 years and quite possibly now to 50. This is irrefutable proof that houses at these levels are unaffordable if you play by the rules that have influ enced real estate Supply and demand for the last three generations. And layer on top of that the effect of five recent mortgage rate increases, with the prospect of a cou ple more to come, and you can see what's going down. Over the last year, Vancouver house prices rose 26 per cent. In Calgary, 24 per cent. In Toronto, just six per cent. I would argue that the inevitable correction in real estate prices has already started in the GTA and will soon be spreading west. Home ownership is still a great idea and a worthwhile goal. But nothing goes up forever-- even here in paradise. 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But I've recently been proven wrong. By our eldest son. He' s a university student, you see. Living with a buddy in a Toronto apartment. It was during a recent visit to their swingin' bachelor pad that I changed my mind and updated my "mosthelpless hypothesis" to read: there is nothing in this world more helpless than a university student living with a buddy in a swingin' bachelor pad. Now, I don't want to stereotype and paint all male students and their swingin' pads with the same brush, but it' s been my experi ence that all these guys are uncivilized slobs, and their swingin' pads are pigpens (hey, no offence intended toward pigs). Alas, my son and his buddy had obviously been working diligently to sup port the stereotype. Upon entering their apartment, I was greeted by clutter, chaos and a smell that alerted my nose to the frightening possibility that something (or, god help me, someone) may have recently died in this very living space. ^ I tried my best to ignore the cookie on the floor in the entry way (granted, I had to Wonder: if you dropped a cookie in the entryway of your apartment, what, beyond paralysis or sheer stu I pidity, could possibly prevent you from picking it up?). Likewise, I never mentioned the dust bunnies mating and multiplying on the floor; or the germ experiment being conducted in the bathroom. Further, to my credit (testament to my renowned restraint) I said nothing about the moun tain of dirty dishes in the sink, festooned with food that I carbon-dated to be about three-million years old. But when it came to the smell that was invading and assaulting my olfactory appa ratus, my poor proboscis, I could not bite my tongue. In part because I was gagging. "Okay, what died?" I respectfully asked. And then I went about tracking down the odious odor. I found the source under the kitchen sink. In the garbage. Where an old chicken carcass had been vacationing for a week, or two. I brought my son into the kitchen and pointed to the offending trash. He gave me two help less looks: the first look questioned, how the heck did that get there? The second was a more perplexed, what do I do with that? I'd throw it out I suggested. You know* down the garbage shoot? Now, sure don't want to suggest that female students are not slobs like their male counterparts - it' s been my experience that women can be just as piggish as men. However, it has also been my experience that no matter how much a slob a woman is, she will nonetheless maintain at least an air of civility in her living quarters. Making her, I guess, a civilized slob. You may recall the old Friends' episode in which Joey is con cerned that his new female roommate-- Janine, a lithe and love ly dancer from Australia (played by model Elle Macpherson) -- is turning his bachelor pad all goshdam girlie. His bath towels are no longer wet and on the floor where he left them. There' s art on his walls. Hand towels in the bathroom. And, gasp, there's some unfathomable something-or-other in a container on his coffeetable. What is this? he cries. Potpourri, she patiently explains. He' s about to go ballistic at this uninvited addition to his apartment when he smells the potpourri, gets all misty-eyed and exclaims: "Why, that' s like summer in a bowl." Which is what I now answer whenever I'm asked what is the difference between men and women? Simple: summer in a bowl. Andy Juniper can be visited,at his Web site, www.strangledeggs.com, orcontftgtedatajuniper@stranglfdeggs.com.