Richardson GMP advisor Hilliard MacBeth has been on an Eastern Canada media blitz the last couple of days in support of his very controversial book, When the Bubble Bursts, a look into why Canadian housing prices are set to fall by as much as 50 percent.
“It will affect all of us,” says MacBeth. “Even the advisors that have a higher percentage of high-net-worth people, what they’re going to find is that it affects everybody because all of our clients are going to be stressed out about the real estate crisis.”
MacBeth’s thesis is a thorough analysis as to why history is about to repeat itself. However, lost in this real estate discussion (WP sister publication Canadian Real Estate Wealth magazine covered the real estate angle on Thursday) is the domino effect that will hit advisors of all stripes in every part of Canada but most especially in Vancouver, Toronto, and Calgary, the hot spots for residential real estate.
If you think CRM2 is problematic, the systematic halving of home prices in this country could create a chaotic situation for advisors when a huge swath of clients, whose single biggest asset is their home, see their net worth cut by as much as 70 percent or more.
In this scenario the risks to advisors are significant.