Memo to Phil Soper

Canadian House Prices


“Canada’s housing market in 2008 should continue to thrive on a balanced diet of strong economic fundamentals, including high levels of employment, resilient consumer confidence, modest levels of inflation and the relatively low cost of borrowing money,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canada is currently enjoying one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that slowly eroding affordability will cause demand to ease, allowing the market to move toward balanced conditions, with lower levels of price appreciation…”

— Royal LePage 2008 Market Forecast.



#1 $fromA$ia on 01.17.09 at 9:47 pm

Garth besides you being my Canadian Hero, This Link below is my American Hero “Peter Schiff”.

Stimulus Package is no good.

#2 Midas on 01.17.09 at 9:59 pm

The optimist in me wants to believe it might stop there.
The optimist in me wants to believe:
-20, -25, -30?

The realist in me thinks:

By end of 2009?

#3 average guy on 01.17.09 at 10:25 pm

Mr. Soper, in your view does this graph indicate the trendline may be possibly broken, perhaps?

#4 rusty on 01.17.09 at 10:56 pm

The Calgary real estate board (a Soper clone) is calling the bottom in today’s (Saturday) Herald (in the real estate paid advertisement section it tries to pass off as news). A truly embarrassing article that neglects to mention that far fewer homes have sold to date in 09 than 08 and far less than 07. Here is a link

The journalist that put his name on the article should be truly ashamed…but I doubt he is.

#5 Alan222 on 01.17.09 at 11:10 pm

Hi Garth
Great blog.

You’ve made mention a few times about the possibility of a Canadian major bank failure.

I sold some long held bank stocks for profit in October. I have about $20K left in bank stocks – including the most suspect of the big ones – down about 50%

Are you recommending to people to unload bank holdings just to be safe?



#6 Tom on 01.17.09 at 11:11 pm

Hi Garth,

Here is something that will interest your readers:

“However, the Globe and Mail reported last month that Canadian banks, trust companies, credit unions and other lenders issued an estimated $56-billion in 40-year mortgages with minimal down payments – seen by critics as being as risky as subprime loans – in the first six months of 2008. Banking and insurance sources told the newspaper that this represented more than half the total new mortgages advanced by the lenders during this period.”

No subprime? Lets keep our heads in the sand and everything will go away.


#7 Wayne on 01.17.09 at 11:18 pm

And Mr. Soper will reply,

‘But no one could have seen this coming….’

#8 Third Chimp on 01.17.09 at 11:25 pm

OK, I’m conflicted. Hard not to somewhat enjoy comeuppance for the greedy, unless of course the government backstops their gambling with money they will extract from the rest of us later.
Clearly there will be a lot less wanton consuming of stuff over the next little while. And I understand that not transforming more non-renewable resources into techno geegaws that stay in your house for a short time on the way to the dump, is good in several ways. But it really is quite tragic that the job loss and stress and sheer hard work of being poor will fall on the shoulders of those who trusted.

#9 RRSP season on 01.17.09 at 11:31 pm

With RRSP season upon us, I’m sure many will have the same question:

Assuming a time horizon greater than 10 years, is it better to put money into mutual funds now or to wait until there are clearer signals of a turnaround?

My financial advisor, of course, recommends the former.

Thoughts anyone?

#10 POL-CAN on 01.17.09 at 11:31 pm

Too bad the chart does not show the 88 through 92 time period… I bet the swing was not 25 % like the above shows…. ouch this one is going to hurt….

#11 TheComingDepression on 01.17.09 at 11:42 pm

I have another interesting video with Gerald Celente ( Recent) But now we also have a video of where the stimulus package went to. A short video with amazing answers from the FED. Click on the name above

#12 Bobby in Victoria on 01.18.09 at 12:00 am

Maybe Mr Soper should ask the former economist of the US National Association of Realtors what he is doing now. It seems that even the most gullible or naive eventually catch on until nobody listens anymore.

There was a time when realtors used the usual terms to describe a new listing; awesome views, gourmet kitchen, designer interiors, etc. Now it seems reduced and motivated sellers are the new buzzwords.

#13 EW on VI on 01.18.09 at 1:13 am

Nice graph garth, but everybody has to look very carefully at what its showing. Its not the direction of the graph so much as its position relative to the zero line – me thinks they call it the abcissa(sp?). Everypoint where the line is above zero is house price increase, everywhere below zero is price decrease.

So for about 5 years price was increasing around 10%. Over last year it is decreasing 10%. So if you go back two years, we’ve broken even in price, we are not down 20%. Conversely if the line where to turn and head gently upwards for a few years, it would still indicate a drop in price, just not as fast.

#14 Predictions on 01.18.09 at 1:26 am

#2 – Midas: Those predictions are tough to pin down without knowing which city you’re talking about.

If you mean nationwide declines of 50% in 2009, barring something really catastrophic, that would be considered not very likely for that timeframe — at least in my humble opinion.

Garth gave his outlook for 2009 here:

… but didn’t pin down where he thought we’d hit bottom. He may feel that’s too early to call because he’s a responsible fellow.

Responsible, reshmonsible — that won’t stop me! Here are my completely-uneducated-based-on-absolutely-nothing predictions:

Toronto (416): Exacerbated by Miller’s brain-child land transfer tax, 25% peak to trough, maybe a little bit more, bringing the average house in Toronto to around $300K. Pessimistic? Perhaps. This roughly matches the 1989 housing bust, and Toronto was far more inflated then than it is today. Yet somehow, that number just feels right to me, so I’m sticking with it.

Condos will be hammered into the ground and anyone who thought that they were urban chic by buying an urban loft will be urban regretting it. Liberty Village towns and stacked-towns will devolve rapidly, destined to become the first slums in Canada to have granite countertops.

Vancouver: A gut-wrenching 55% peak to trough, ringing the average house in at $350K. People in Shaughnessy will still be listing their houses in the multi-bajillions long after that ship has sailed, oblivious to the new realities. And the odd idiot will buy one. Politics of the city will change with the new-found jadedness; organic vegan fair trade hand made dog biscuit stores will disappear. After the Olympic-sized disappointment, all the people who were celebrating on the day they were awarded will tell everyone they know that they never wanted them to come in the first place. And the inevitable increased property taxes will put the final nail into the Vancouver real estate coffin and cause one more tumble after the fact.

None of what happens, however, will stop people from Vancouver from droning on and on about how Vancouver is a world class city. Since the housing bubble has burst, it’s high time to burst that bubble, too: It isn’t.

I don’t know enough about other Canadian cities to even guess. So that’s my half a nickle.

#15 Investx on 01.18.09 at 1:52 am

I’ve become a fan of Peter Schiff as well. He predicted the US real estate crash.

#16 Future Expatriate on 01.18.09 at 7:10 am

#2 Midas: How far and how quickly will depend on how fast Obama and his coalition screw up everything in the US.

My guess? Sure, 50% by the end of 2009. Surely by the end of 2010. Sooner if the US nukes Iran.

#17 miketheengineer on 01.18.09 at 8:16 am


What I have read on the internet, radio and events of the last couple of weeks, it all is evident of a major, life changing event, like the 1930s or 1980s recessions. It is scaring the crap out of me. Even if what I read is half true, it is going to be a challenging and changing time for everyone, weather you want to change or not.

I lived in Hamilton in during the 1980 recession. When that one came through, it just about killed that city. I remember reading about the job losses, just about everytime I opened the Hamilton Spec.

I have looked at the sell your house and head for the hills idea. We work in the city. We live in a small small house ~1000sf. Renting would be the same as owning. So we are going to stick out in our house.

In my scouting adventures over the last 3 weeks, I noticed that food prices have been increasing. I have noticed that food stores are not carrying the stock they once had. I noticed that the milk is not as fresh as it once was (ie check the dates before purchase). I went to my local dollar store, and the “candle” area had a lot less candles than before xmas.

Right now, things are still in abundance. Right now things are still at a reasonable price. If you are working you still have some cash available.

Stock up on the stuff you use. By 2010, things are going to be very very tough. If we all stock up now on the stuff we use, we will weather the storm and be o.k. What you buy is up to you. I look at stuff from the USA that I use. Will we be able to get that stuff if the USA has internal issues. I have also looked at Vitamins. Next winter it may be difficult or expensive to get fresh stuff, if there are issues in the USA.

Just some thoughts. No one knows for certain what is going to happen. If we take some steps to prepare, we will all be o.k. Failure to prepare, is just plain denial of the critical situation that is just starting to unfold.


#18 Bottoms_Up on 01.18.09 at 8:31 am

What he meant to say:

“Canada’s housing market in 2008 WILL NOT continue to thrive on a balanced diet of strong economic fundamentals, BECAUSE OF LOSS OF employment, resilient consumer confidence, AND CONSUMER SAVINGS AND EQUITY,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canada is AT THE END OF one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that FASTLY eroding affordability will cause demand to PLUMMET, allowing the market to move toward A BUYER’S MARKET, BUT with NO FORESEEN levels of price appreciation…”

#19 Bottoms_Up on 01.18.09 at 8:40 am

From #1:
hahaha, he says ‘greater fool’ at about the 3:20 mark. Worth the watch.

#20 David Bakody on 01.18.09 at 9:52 am

9 RRSP season on 01.17.09 at 11:31 pm

Use your RRSP for safe investment (GIC) take your rebate and pay down your mortgage ……

I disagree. RRSP investments should be very growth-oriented for most people, because this is their longest-term money. There is no doubt the stock market will be vastly higher in 20 years. — Garth

#21 North Vancouver Citizen on 01.18.09 at 10:27 am


…Why are you not pointing out that a very important factor is being overlooked across Canada?

CREA and the local Real Estate Boards continue to steal $$$ commissions as long as homeowners are dumb enough to presign and agree to current commission rates.


Why are homeowners agreeing to the @ 4.5% to 6% commissions?

Canadian Real Estate Boards are acting as Giant U.S. Hedge Funds, equivalent to their 2 and 20 programs.

These Hedge Funds are dying off…and Homeowners need to smarten up too.

#22 Jonathan on 01.18.09 at 10:28 am

$fromA$ia thanks for the link on Peter Schiff.

#23 Just a Girl on 01.18.09 at 10:45 am

#17 miketheengineer wrote: “In my scouting adventures over the last 3 weeks, I noticed that food prices have been increasing. I have noticed that food stores are not carrying the stock they once had. I noticed that the milk is not as fresh as it once was (ie check the dates before purchase). ”

Mike, I have noticed the same thing. I have bought dairy products without checking the date (a matter of trust), only to come home and find they were within days of expiring, if not expired. I have noticed some vegetables being out of stock for a week or more. You keep coming back every day, hoping to ‘get lucky!’ I have watched a crowd of shoppers empty a box of fresh green beans in 5 minutes, thrilled to find them again.

I know this is not the same story for every store, nor every region, but like you I am noticing some negative changes in the availability, freshness, and price of food.

#24 Bottoms_Up on 01.18.09 at 10:47 am

A realtor that deserves some respect:

So I’m chatting with my brother this morning, and he starts telling me about a realtor that cold-called him asking if he was in the market for buying a house. Well, my brother and his fiancee are DINKs (Double Income, No Kids), and currently renting, and thinking of buying in the GTA. So he says yes, and asks about signing a contract etc. because he doesn’t want to treat the realtor unfairly. The realtor says he doesn’t want to sign a contract, but will work for my brother and if he likes his service then they can discuss a contract etc.

Talk about putting your money where your mouth is!!

#25 JET on 01.18.09 at 10:57 am

What a fall off the cliff! Wow.

I added a chart that shows prices in the GTA in relation to sales for the period between 1966-2008. If the trend of the past three months continues for 2009, the chart should look like 1989:

#26 Kestral on 01.18.09 at 10:59 am

Hi Garth, just my 2 cents (worth less than 2 cents since I’m offering it for free), but imo there’s no guarantee that the stock markets will certainly be higher in 20 years.

It’s been 10 years for Japan and the stock market is nowhere near where it once was. And this is all just beginning here in Canada. If Japan was in a better situation (with higher savings rates, net exporting country, more productive workforce) and they’re still struggling after 10 years, then I don’t see why the Canadian (and American) stock markets couldn’t be lower than current levels 20 years from now.

Right now all my savings (into the six-figures, RRSP and non-sheltered) are 100% cash, have been since last July. Until the technicals change and a clear bottom is formed I’m not touching this dog with fleas called the market with a 10 foot pole. In the meantime I’ll just keep earning interest in this deflationary environment.

By the way, I just got my book yesterday, thanks for the autograph!

#27 Jonathan on 01.18.09 at 11:05 am

The Bond market collapsing is a very convincing argument. So how will the US be able to fund there current debt if there are no buyers. How can they keep bailing everyone out, if there are no buyers. I suppose the only buyer left, as Peter Schiff said, will be the fed. That means the US will be spending full dollars on bonds that are worthless – which would cause uncontrollable inflation and massive instability in the US currency. The US will be forced to crank up interest rates sky high to attract buyers. In a year we may look back at zero percent US interest rates as a ‘bubble’ in itself.

If this argument holds up, then Canada should factor this in to our deficit spending plans. Our plans to spend 40 billion a year to avoid a recession could perhaps be the worse possible method to get out of this mess. For one, debt is more likely to fuel pessimism about Canada’s future and cause a greater retraction in consumer spending – especially in the longer term. Two, if the bond market collapses, the increasing interest rates on the debt may do far more damage to the Canadian economy than the benefit it initially created.

#28 dd on 01.18.09 at 12:17 pm

#27 Jonathan

Bond market collapsing?

The bond market will not just be for the US. Most countries will have to float some kind of debt over the next couple of years to stay afloat.

Who is going to buy all this debt? The pension funds that bought all the ABCP and other debt of yesterday. The government is replacing the debt that private industry brought to the table yesterday. This is the big test … reflating the debt markets so the machine can keep on spending.

#29 Jeff Smith on 01.18.09 at 12:23 pm

Just saw this in the star.

#30 john on 01.18.09 at 12:31 pm

Got your book yesterday Garth “after the crash”–started reading it–excellent!

#31 Kash is King on 01.18.09 at 12:31 pm

#27 Jonathan , I’ve seen it postulated that the way the US will keep foreigners buying into their debt, even for 0% , is by the lure of a rising US dollar. Capital gains appreciation on the investments will make them appealing.

I believe that’s what we are seeing now.

#32 Eduardo on 01.18.09 at 12:45 pm

It’s my opinion that all the folks who are too shortsighted to worry about global inflation in a serious way are in for a huge surprise following this period of deflation.

#33 Grantmi on 01.18.09 at 12:49 pm

15 Investx: I’ve become a fan of Peter Schiff as well. He predicted the US real estate crash.

I agree Ivestx.

I bought his book Crash Proof: How to Profit From the Coming Economic Collapse back in 2007…. and I let it sit on the bookshelf for about a year until the kaka started hitting the fan!! I wish I had picked it up sooner!!

I’ve also been a big follower/reader of Jim Rogers, Mark Faber, Nouriel Roubini, Gary Kaltbaum, Peter… and Garth for quite some time!

Some of them have been extremely negative. … (like Roubini)…. and so far they have been spot on!

#34 Mike B on 01.18.09 at 1:08 pm

Ok now North Van citizen has my attention and I agree whole heartedly with. Commissions are just crazy for the work that is done. There should be some scaling … Bigger the pie the smaller the commish. If you institute NVC draconian measures of halving them you would also eliminate 60% of them leaving only the pros to deal with. The worst part of buying a house OR selling is the agent experience. Here here NVC
As for thinking Van will be some economic powerhouse. Doubtful at best. Van is built on sand and any biggie earthquake will level the place. Port city notion I buy, nice weather.. Granted… Manufacturing is what made japan, china and korea such powerhouses. Manuf has such a huge multiplier effect that it is what drive much of the economy. A service based economy can only do so much plus it is low wage driven.

#35 EJ on 01.18.09 at 1:16 pm

#4: Rusty

I think the RE industry needs a cease & desist on making predictions. Tell clients where market is right now, but nix the fortune telling.

I really wonder how they come up with their numbers, because it seems as if they are completely oblivious to what is going on in the world economy. If you do even a cursory amount of reading, you wouldn’t be foolishly predicting price increases in 2009.

One thing that is different in this bust is that we have the Internet. The truth is being exposed to more people now than ever before, and the industries can’t cover it up like they used to. Once statements are made now, they are on record forever, available to all.

#36 Jonathan on 01.18.09 at 1:25 pm

hey dd,

There are quite a few analysts who believe the bond market will collaspe. I have even read speculation on this in the Economist magazine.

The theory is that the bond market is being held up right now with zero percent interest rates along with a very risk adverse market. As soon as the government stimulus and other measures step in, the economy will have a short rebound. The rebound will encourage investors to move towards riskier assets. You have to remember that millions of large investors have only temporarily moved their money away into bonds from commodities and blue chips. So when the rebound occurs, people will jump back in to previously held positions.

This rise in commodities along with policies such as quantitative easing put in place by central banks around the world, will have huge inflationary pressures. We have to remember that it was just in July that the US hit 6% inflation and this would have easily been over 10% by now had the market not collapsed. During this short rebound in 2009-10, prices for oil and other assets will skyrocket possibly hit new highs.

Right at the start of this rebound the bond market will collapse, possibly as early as the mid to late-2009. That will trigger the Central banks to jack up interest rates to encourage investors to buy debt and cover the cost of inflation.

The rise in interest rates will have a massive negative effect on the economy. House prices will hit the dirt and the stock markets will then have their final collapse. It is important to note that as Garth and many others have anticipated, this perfect storm ties in with the baby boomers retiring. The result will be a depression that we have to this day only read about.

Much of this theory ties in with a rebound. So if you believe that this recession has an end, then you need to take note that the rebound will trigger a depression. If we can maintain zero percent growth for ten years, then we have nothing to worry about.

What can you do about this theory. For one you can sell any bonds you have immediately. Second hold on to your stocks and sell them when the market peaks in a year-year and a half. Then when the bond market collapses, you can buy back into bonds and make a fortune there.

#37 Bill-Muskoka (Not Anymore) on 01.18.09 at 1:43 pm

Ah, all the forecasting for the economy by all these ‘experts’ (none of whom have any bias or self-interest of course) is dizzying.

I think I will stay with my life experience and the S.W.A.G. (Scientific Wild Assed Guess) method. Like the Farmer’s Almanac, I find it far more reliable. I use the greatest gift ever given…My mind!

Remember that those who pontificate these forecasts do so primarily to make the future they want happen by making the Sheeple believe in them. It is just another baseless religion, complete with their own Temples (Wall and Bay Street), Priesthood, and the all essential ‘serfs’ who mimic like parrots the mantra of the priesthood.

The only thing they are lacking are miracles that correlate with the BS they spew forth like a broken sewer of economic wishful thinking. Someday they will discover truth and actual human nature. That will bring forth the demise of the Madison Avenue marketeers who have had their run for way too long as well.

Like the old Druid saying teaches ‘Pelgius used a triad – posse, velle, esse. We distinguish three things; the ability, the will, the act. The ability is in Nature, and must be referred to as God, who has bestowed this on his creature, Man. The other two, the will and the act, must be referred to mankind because they flow from the fountain of free will.’

Likewise, ‘In Tractatus de Divitiis – a tract on wealth – in which the writer used a triad teaching on divitiae, paupertas, satis, The Celt claimed that mankind was divided between wealth, poverty and sufficiency. He argued: ‘Overthrow the rich man and you will not find a poor man…for the few rich are the cause of the many poor.’ (Quoted from ‘A Brief History of The Druids’ by Peter Berresford Ellis)

#38 Jonathan on 01.18.09 at 1:51 pm

Demographic & Commodity Cycles:

Demographic every 40 years,

1925-1935 Demographic & Commodity:
1925 US Home prices peaked
1928 Stock Market Peak/Crash
1928 Bonds Peak
1929 Small rebound in stock
1932 Bond Market Crashes
1930-33 Depression

1965-75 Demographic:

1965 US Home prices peak
1968 Stock Market Peak
1970 Recession
1970 Government stimulus
1971-2 Rebound
1973-1975 Recesssion

1980s Commodity Cycle:

1980 Oil Peaks
1980 Recession
1981 Economic recovery, stock market rebounds
1982-84 Worst recession since great depression

2008-2014 Commodity Bubble & Demographic:

2005 US Home prices peak
2008 Stock Market peak/crash
2009-10 Bond market collapse
2009 Stimulus kicks in
2010 Small economic recovery
2011-2014 Depression

#39 RRSPs and preperation on 01.18.09 at 2:12 pm

In terms of investments Garth is anti gold (from what I remember) but I’m pro gold – not as a get-rich scheme but as capital preservation. I buy it via Central Fund of Canada in both my RSP and outside.
1) diversity – don’t have all of your eggs in one basket (err bank or investment firm)
2)bonds are good. I like the book Your Money Or Your life and was sitting mostly in bonds when this happened. My RSP was growth orientated as Garth suggested and I’m down 50% on that portion (the rest was bonds, and even the growth part was peak oil aware energy stocks ..). Oddly enough my energy stocks are not doing badly (no big losses) but my RSP funds that are enery based have been skewered.
Store food – look at what you need and not what you want. We have camping stoves and fuel and buy 25kg sacks of oatmeal/whole wheat/beans. The issue will be having enough energy to cook the darn stuff. Friends have hand grinders and just buy wheat groats – so that they can grind their food as needed (it’ll last much longer that way).

The problem is that you sink or float as a community -talk to neighbours and get them storing food and preparing for whatever may come. I see that John Robbins must have had all of his eggs in the Madoff basket and someone made-off with all of his savings.

Start gardening, have seeds, save seeds, store crops (it was a bad year for squash and we’ve now eaten up our potatoes, onions, leeks, rutabagas). But have some fun and learn how to be a bit more independant. For many that may be just learning how to cook food.

In my case we have a car -but we can do without it. My wife is now out of a job (education – university prof) for at least three years as some universities have started moving (canceling hiring, merging/removing courses). We can do without a car and one costs about $5k/yr but it only costs around $12k/yr for my family of 4 (home, car, food, energy and maintaining the home/car). Something like 80% of our take-home goes into charities and savings.

Unlike Garth -I have no aspirations to buy a pollution spewing land iron dragon (perhaps he “needs” his?) – but I’m all game to buy 2+ acres, set up a bigger garden with more fruit trees, build a straw bale home that is kind of “passive house” but can be habitable with minimal energy input and has a cold cellar for food storage. I’ve visited Earth Ships here in southern Ontario as well as worked on farms with off-grid homes (read pioneer sort of living – no elec and no running water). If you have the land you can be independant – but you’ll never stay that way. Work towards building an eco-village (that’s sort of died in our community … at least until it gets kick started again) and finding a group of like minded people.

Basically – get set for living a lot closer to the land, having a lot less and making due with less. It doesn’t both me – I spent most of my life working/living on farms and saving most of what I earn. I wish that we still had the family farm though…

A fine comment except for the gratuitous and out-of-context dig at my motorcycle. Any more of that and you’d better hide your wimmim, cuz my gang is coming. — Garth

#40 Ess on 01.18.09 at 2:26 pm

Did anyone read the last few lines in this article?

I’m starting to get really really angry at this now! Stop wasting my money on this crap. I thought all the loans here were, ahem…, safe and secure. First the government buys $75B worth of crap that they insure themselves and now the banks want to get rid of even lower quality crap. I bet you this is going to start happening and it won’t even make the headlines when the government starts buying the bank’s 40 year zero down sub-prime mortgages. This is insane!

From the article:
“Banks say they would also be able to buy up more loans if they could sell a wider range of mortgages to the government. The government has already agreed to buy up to $75-billion of mortgage-backed securities that carry a government guarantee, but now the banks want to be able to off-load other types of mortgages onto the government books so they can free up space on their balance sheets to lend more.”

#41 yukon Don on 01.18.09 at 2:31 pm

To me it is simple , if you take the bottom of the pyramid out of the real estate market , the zero down 40 year mortgage , then the price has nowhere to go but down. The higher the market has jumped in your area , fueled by speculation and easy credit , the farther it will fall. Hugh down payments are now needed and the deflation that has just start in the economy will hamper any first time buyers. Plus as the prices enter a free fall next summer , the wait and see crowd for price drops will fuel the decline in over priced markets. When prices have been spiking up so far in the last few years , real estate sales people are spreading b.s. to try and save there skin , the fall in prices will be equal or maybe greater than the rise . I am looking to buy some land in the greater Victoria area in two to three years and am expecting to pay less than 50% of the price now being asked. Tell me Garth and readers am I dreaming?

#42 grandeprairiegirl on 01.18.09 at 3:22 pm

#17 miketheengineer.
I’ve had the crap scared out of me for over a year now.
As to the food situation it doesn’t seem quite as bad here. My dad used to scare the crap out of me with doom & gloom scenarios about this when I was a teen. Don’t know what he knew then,but over the years those rants faded from my memory. It’s all been coming back to me this last while. Should have paid more attention.
And every time I’ve gone grocery shopping over the last year have bought extras in dry goods and canned, the last few months also extra dry dog food with the farthest out expiry dates I can find. It won’t go bad if nothing happens, however I don’t want my only dependant starving. Being single makes it a little tougher overall to prepare for anything as I’d like to, but you do what you can. I plan on studying so I can pass the FAC course. However I cannot believe the price of guns. Are they any less expensive to buy used?

On another note I do read the weekend editions of the Edmonton Journal not that I’m a big fan of msm and haven’t been in a long long time. However it’s nice to curl up on the couch sometimes and read print,don’t have a laptop and sitting in front of a pc is not the same.
Garthe made Gary Lamphier’s column on the front page of the business section. Here’s the link.

Received an email the other day that Garth’s book is on it’s way. God I hate waiting sometimes.
Have a great 2009 all – no matter what. Anyone who has a reasonable amount of common sense should be alright.

#43 grandeprairiegirl on 01.18.09 at 3:25 pm

Oops that should read ‘Gath made Gay Lamphier’s column’.

#44 Grantmi on 01.18.09 at 3:28 pm

Interesting look at the Canadian Association of
Accredited Mortgage Professionals Nov 2008 report!!

This chart from their report is a glowing example of the frenzy that occurred in the 40 Year Amortization loans.

Over 50% of them in the last 12 months (Nov 08) were over 25%… and of those 32% of them were at 40%.

Nope….. no sub-prime here!! (Please keep walking… do not look at the car crash please!)


#45 Grantmi on 01.18.09 at 3:36 pm

Sorry! I made a mistake on my last post.

I should have said – ” were over 25 years, .. and of those 32% were at 40 years!”

Here’s their report:

#46 hal on 01.18.09 at 3:37 pm

I still don’t get it. In Kelowna, the average household income is 65K. The average 90 year old 2BR no basement crack shack in the industrial area of town is 450k, never mind a decent 3br basement home in a decent neighborhood where you can actually raise your1.9 kids. Where is the affordability for the average family? Houses should be 225 to 250K. Even in other centers like Vancouver, Calgary, Toronto, where is the affordability? I must be dumb as a post because I just don’t get it.

#47 * on 01.18.09 at 3:39 pm

Is Edmonton’s housing market picking up? I really don’t think so, but they seem to be eating away at inventory… The number on the following link is 8544.. A few months ago it was around 1400 listings. Am I missing something? Oh well I still won’t buy in Edmonton.

#48 jess on 01.18.09 at 3:39 pm


the new coalition of the willing : aggregators
Are we in a Keynes Revival ?

#49 * on 01.18.09 at 3:40 pm

make that 14,000

#50 Charles Oxley on 01.18.09 at 3:40 pm

#9 RRSP season on 01.17.09 at 11:31 pm — “Thoughts anyone?”

FWIW, I would load up with a non-registered plan in good-quality mutual funds, and have some kind of a plan set up so that an equal amount is automatically withdrawn from each paycheque.

That is what I used as a vehicle to pay the RRSPs off. What one doesn’t have, one can’t spend.

Garth is right — in two decades or so, the stock markets will be way higher than they are now. It’s this interim stuff which has to be dealt with first.
#38 Jonathan on 01.18.09 at 1:51 pm

2008-2014 Commodity Bubble & Demographic:

2008 Stock Market peak/crash
2009-10 Bond market collapse
2009 Stimulus kicks in
2010 Small economic recovery
2011-2014 Depression
Dates are correct, but it leads to 2015 when zillions of BB’s take CPP, OAP and / or GIS.

With the way both levels of govts. are spending into deficits, the three just mentioned may not exist, at least in their present form.

Pity those boomers; once they figured they had it all and took on more and more debt, figuring the good times would never end.

When the time comes, they will have nothing.

#51 john on 01.18.09 at 3:59 pm

#40 Ess on 01.18.09 at 2:26 pm Did anyone read the last few lines in this article?

I’m starting to get really really angry at this now! Stop wasting my money on this crap. I thought all the loans here were, ahem…, safe and secure.
>>> Your not the only one angry..i understand our government is also buying up (or plans to) credit card debt from the banks. Business needs customers to survive (the ones that are in trouble don’t have enough customers to survive and its not going to get better in the forseeable future)–loans without strict guidlines and potential to be paid back spell disaster. The only ones going to gain out of this scenario are the Banks leaving the taxpayers with the burden for many years. Why should our tax dollars be going to Banks to reward them for their mismanagement while we suffer for years for their mistakes. Doesn’t it just make you feel warm all over to know our corporate executives are maintaining their lifestyle while jobs are disappearing,basics such as health care are being ignored etc.etc

#52 kitchener1 on 01.18.09 at 4:05 pm

A fine comment except for the gratuitous and out-of-context dig at my motorcycle. Any more of that and you’d better hide your wimmim, cuz my gang is coming. — Garth

Garth, just curious as I too ride a motorcycle, what do you ride? Im going guess it a Harley, me I prefer the super sports myself but its all good as long as your on two wheels!

Afer I demolished my Road King, I bought a VTX 1200. Love it. — Garth

#53 grandeprairiegirl on 01.18.09 at 4:10 pm

Crap maybe I should start using spellcheck or something, lol.

#54 Popping Bubbles on 01.18.09 at 4:44 pm

* … listings will jump back up in a few months when the spring market gets rolling. Sellers and realtors often pull listing in the slow winter months so that the property doesn’t appear to have been sitting on the market for a long period when the busy selling season begins. And new sellers usually don’t bother trying to sell in winter, preferring instead to hold off for a few months.

#55 dan on 01.18.09 at 4:56 pm

“40 Ess on 01.18.09 at 2:26 pm Did anyone read the last few lines in this article?

I’m starting to get really reaaly angry at this now! Stop wasting my money on this crap. I thought all the loans here were, ahem…, safe and secure.”

This is nothing more then financial terrorism. This stupid government morons want to punish hard working people who lived within their means and avoided debt to pay for the ignorant and stupid who lived above their means without working for it. What kind of a stupid message government is sending? Don’t work hard or save just spend/gamble/invest on borrowed money and if you can not pay it back you just go bankrupt with the system. As of late I have started to reduce hours of work and increased my credit so I can spend spend spend without work and invest/gamble without using my money. If i can not win and pay it back I laugh like the rest of the deadbeats.
Stupid CONservatives/liberals (same party) are sell outs and should be punished for crimes against humanity.

#56 hmm.. on 01.18.09 at 5:04 pm

well there might be a R E market in the spring after all,
since there seem to lot of suckers lining up to jump in at
25% discount from all time high, hoping for ? what ?,

remember your 25% down may disappear very quick

#57 Bill-Muskoka (Not Anymore) on 01.18.09 at 5:09 pm

Ah, we just finished watching the ‘We Are One’ concert, from Washington, D.C.’s Lincoln Memorial (If you have never been there, as I have, you have not experienced the fact that no matter where you stand inside, Abraham Lincoln appears to be looking right straight at YOU! It is like he is alive and there) on HBO in HD.

We are laughing, smiling, and filled with joy to watch, at least, one people rejoice in freedom and happiness after years of dark and despicable lies.

Canadians may return to their humdrum political crypt of blame and lackluster leadership, worrying more about money and power than the present of the future of people of our great and marvelous country.

You know, we really outta ‘Get Some!’ If we don’t, then Whoa unto you Canada!

Today, I am PROUD (after a long trek through the wilderness) to again say I am an American! Now, of only, I can, again, say ‘I am proud to be a Canadian!’

Such a marvelous country we are, but torn asunder by power perverts, ineptitude in leadership, and lies, lies, lies.

#58 Bertie on 01.18.09 at 5:24 pm

#4 rusty “Here is a link”
“The journalist that put his name on the article should be truly ashamed…but I doubt he is.”


You probably already know this, but the broker/owner quoted in the article is one whose words can not be trusted, and no wonder here that he said what he said. His reputation is as the epitome of those who give that industry a bad name.

#59 North Vancouver Citizen on 01.18.09 at 5:32 pm

Where and Why it is not safe.

The Western World which supports manufacturing economies has stopped “dead in its tracks it’s “Consumerism lifestyle”.

… Exascerbated by either overpopulation or religous/political, Growing turmoil continues….in India/Pakistan, Middle East incl Iran, Europe(UK/Germany are being taken down as they lent big $$$ to the Have Not European Emerging Economies), China will have 50 million unemployed within two years if their Manufacturing Economy keeps slipping…a last gasp attempt of another Yuan Devaluation will not work…the world has stopped buying goods, & Russia/Ukraine.

Look for more wars to break out soon.

With growing misery in these places, Govt’s only alternative will be war….war “culls” population and allows for faster economic revival.

Canadian cities, Winnipeg west to Vancouver are deemed “safe” cities as they are relatively lightly populated….Toronto is densly populated with a dying manufacturing base and with a high chance of citizen turmoil so is not considered a safe city.

Garth suggests the possibility of loss of services…that in itself underlines Toronto’s future negative chances.

#60 Sail1 on 01.18.09 at 5:40 pm

Adding fuel to the fire.

Home buyers taking out a variable-rate mortgage, meanwhile, will find a premium over the prime rate of 70 to 80 basis points, rather than the discount they might have found just six months ago. (A basis point is 1/100 of a per cent.)

#61 john on 01.18.09 at 5:42 pm

#52 kitchener1 on 01.18.09 at 4:05 pm A fine comment except for the gratuitous and out-of-context dig at my motorcycle. Any more of that and you’d better hide your wimmim, cuz my gang is coming. — Garth

Garth, just curious as I too ride a motorcycle, what do you ride? Im going guess it a Harley, me I prefer the super sports myself but its all good as long as your on two wheels!

Afer I demolished my Road King, I bought a VTX 1200. Love it. — Garth
—Gotta love them,i had many bikes thru my lifetime sold my last one 2 yrs ago –1100 yamaha–awesome bike! but you gotta love the sound of a Harley :-)

#62 North Vancouver Citizen on 01.18.09 at 5:51 pm

Ohio Governor Asks For Across The Board Union Pay Cuts

….Will the same things be demanded for Ontario’s Unions?….

#63 on 01.18.09 at 6:16 pm

Yamaha FZ1 here.

I’ve been watching house listings (ie. not condo) in Toronto very closely for over a year now. In 2009, I’ve seen a bunch of old listings come back at the same price or a little less. I’ve also noticed new listings are generally priced quite a bit less than the re-listings.

Garth, you previously had a comment:

“You should be in no rush, however some excellent opportunities will be here by the summer.”

Does this still hold?

Yes. And I admire your work. — Garth

#64 Investx on 01.18.09 at 6:23 pm

#26 Kestral:
“It’s been 10 years for Japan and the stock market is nowhere near where it once was.”

Good point. Not only that, but the Dow Jones went through a bear market from about 1967 – 1982! That’s about 15 years.

#65 Bill-Muskoka (Not Anymore) on 01.18.09 at 6:30 pm

Oh, speaking of Corporate Speak BS, just listen to the statements made by Rogers Centre and Feld Motor Sports about their ‘safety record’. Seems Rogers Centre had to move people because of damage to seats from last night’s show.

Wait until Monday when the lawyers serve them with the multi-million dollar lawsuits for killing a six-year old boy by flying debris.

Most motor sports, like the Indianapolis 500 have safety nets to absolutely prevent flying debris (other than fuel) from endangering the fans.

But, corp speak has now become an art form of propaganda which Goebbels would be so very proud.

Fall on your knees and worship the Almighty Profits. The days of the Roman Collesium are alive and well.

Review the Exxon-Mobil response by their CEO to the Valdezx catastrophe for a primo example.

#66 Trekie2 on 01.18.09 at 6:54 pm

As an avid motorcyclist…all my life…I will not go toe to toe with you regarding the economy as I believe I will loose…and I thank you for my gained in site from this site and your books…..BUT!!!!! The VTX is either a 1300 or 1800….Honda never made a 1200……mistakes like this are blasphemous !!!!! :>)

Thanks again, and keep the sticky side down….

So my finger slipped. Sue me. — Garth

#67 Kestral on 01.18.09 at 6:57 pm

Back to the stock market discussion, the Dow Jones Industrial Average peaked at about 381 points and fell to 40 points during the Great Depression, that’s about a 90% drop. We haven’t had that drop yet, and it took 22 years for the Dow to recover from those lows.

imo this is not the time to buy or even dollar cost average into this market, yet. And I’m putting my money where my mouth is, my cash is all on the sidelines, but I’m keeping an eye on the market to make trades here or there.

#68 go green on 01.18.09 at 7:20 pm

Re RE – neighbours next door went into hospital then nursing home. In August children wanted to sell their home quick. Someone we know, along with a partner, bought it at $219. (cheap price) & immediately put it on the market for $260. It never sold as it required major updating. For the last 2 months they’ve been renovating it. Removed 25+ yo carpets, wallpaper, removed walls, redid bathrooms, kitchen, etc. It has a cut up basement in-law apt. & a large separate garage with a side greenhouse attachment. Good sized lot on a nice cul-de-sac, close to all amenities. Will be curious what it goes for, likely in the spring. BTW, its in Dartmouth, NS where house prices haven’t followed the national trend, IIRC.

When I see pics of shacks out west going for $350-$400K I find it incomprehensible. I know wages are higher than here, but not such that they are justifiable.

Re stocking up on non-perishables. I’ve been doing that for over many years and always buy extras when I see good sales. Helps when you don’t have to live fom one paycheque to another. I saw a particular product that my husband enjoys on sale for $.99 which normally sells for $1.29. Another brand beside it was $1.69. I was sure they were going to discontinue to lower priced brand so over a few months I purchased about 100 or more of them. Sure enough, the cheaper brand was cancelled. I’ll be checking out canned tomatoes and fruit and will be stocking up on them along with a few other products. I’ve a fair amount of storage space so I can do it.

We’re due for some nasty weather tonight and we just experienced a power flic so got out the candles, etc. Hubby had a nap as he anticipates getting out the shovel/snow blower later this eve. Wonder whether the schools will be closed.

Good luck to everyone during these gloom times. Keep your heads out of the sand & prepare. Still awaiting Garth’s book.

#69 Da HK Kid on 01.18.09 at 7:40 pm

Thanks Garth, you must really have it in for this guy! I would to with all of his fraudulent claims without any clear supportive analysis.

How many of these dreamers have cashed in and now sit on the sidelines safely while all of those who took their advice struggle to survive.

My father who grew up in Guelph ON then Hamilton through the depression still lives in the same house that he paid cash for in 1954 for $8000. Optional garage $600. 54years of no mortgage!

All his money is invested in his pension from 45 years at Westinghouse and Canadian Savings Bonds. If these two are threatened, then I believe we are all toast.

Anyone worried about CSB’s?

#70 a renter on 01.18.09 at 7:43 pm

#63 Yamaha FZ1

Excellent site, thanks!

#71 Alina on 01.18.09 at 7:50 pm


I just looked through your new book”The troubled future of real estate” and noticed that you still have one house in urban area, one lake side house, one rental property close to Parliamnet and plus another commercial property outside of Toronto. Hm-m-m

Why don’t you sell all this properties and why didn’t you start renting if real estate has so troubled future?

That’s not my new book. My Ottawa condo was rented. My real estate holdings never exceed 40% of net worth. Need my belt size? — Garth

#72 Jake on 01.18.09 at 7:57 pm

#57 Bill-Muskoka (Not Anymore)
“We are laughing, smiling, and filled with joy to watch, at least, one people rejoice in freedom and happiness after years of dark and despicable lies.”
You think the dark and despicable lies will end with Obama? They most certainly will not. The only difference is that you will eagerly jump on board this time.
Don’t let the euphoria of the moment cloud your judgment. War will still be peace.

#73 Darryl on 01.18.09 at 8:41 pm

#36 Jonathan
When you say sell bonds do you mean corp.bonds as well? I have RBC bonds at 5.25% that mature in 2022 or around then. How safe do you think they are?

#74 kitchener1 on 01.18.09 at 11:16 pm

VTX 1300 NICE! I ride a Kawi ZX10R.

Gotta love the charts. One thing about numbers is that they don;t lie.

#75 $fromA$ia on 01.19.09 at 1:14 am


The 5 Canadian bank’s stocks were downgraded to a SELL late last week. Heard the news on BNN.

The Canadian banks were issuing premier stocks about a week and a half ago. Some investment exec’s were pushing these banks as a good buy at around the same time for the dividends and value!?!
What does that tell you?

Tells me they are offering AAA grade stock with decent (ungauranteed dividends) for desperately needed funds.

Now it seems they are in trouble with some rated downgrades to sell.

Its your call…Maybe check out BNN.

#76 $fromA$ia on 01.19.09 at 1:14 am

Jonathan, Glad to help out with the introduction of Peter Schiff.

Make sure you idolize Garth more though ok :P

#77 $fromA$ia on 01.19.09 at 1:16 am


Glad to intro Peter Schiff.

Make sure you show your loyalty and idolize “Big Daddy Garth”, K?

#78 Bill-Muskoka (Not Anymore) on 01.19.09 at 9:17 am

#72 Jake on 01.18.09 at 7:57 pm

In my very best Donald Sutherland voice ‘Stop with the negative vibes Moriarity!’ LOL

It is not merely Obama, but the American people who will make it happen. It will take time, but my fellow countrymen have re-awakened and purged themselves of the Rethuglicans in Congress as well.

Those together with Obama’s bi-partisan attitude will Git ‘er DONE!

Now, what will Canada do? I see Clement is calling for the CAW to take wages cuts and they, as usual, are saying NO!. Well, they can either thelp Git ‘er done or simply Git out.

Hell, we can’t even run trains on time in the GTA, or get anything done because of spineless, visionless politicos. be it the waterfront, subways, rapid transit, street repairs, infrastructure maintenance (until it breaks and the shit literally is spewing out).

We have a bunch of whiney business people who want a low dollar just to make them competitive, but will they do what the Americans did and try be4ing innovative? Damn seldom anymore. We had a marvelous bunch of Doers, but the lazy have taken over the helm. There are still some marvelous Canadian minds, but who hears of them?

We simply have no leadership anymore here in Canada. Harper and Ignatieff will do the only thing they know how, play Copy Cat because neither of them has a clue about anything other than hating each other and trying to grasp more power. Neither are a leader. They are just politicians, and the very would is an acronym for inaction.


Derived from the Greek word ‘poly’ meaning many + ‘tics’ meaning Blood sucking parasites.

I do not know if you were alive during JFK’s tenure, but he energized the nation like no other president in history, except Lincoln and FDR. The people stood up and accomplished marvelous things. They literally shot for them moon and made it thanks to JFK’s leadership and vision. He also prevented WWIII by taking a firm, but sensible hand. Likewise, he refused to feed the military/industrial complex more taxpayer money by entering Viet Nam. They killed him for that, and his brother Robert for daring to take on the damn scumbag Mafia.

Lessons were learned, and will be applied. I truly care, and hope that Canada awakens and stands up tall because Yes, we CAN too!