Scandalous in Surrey


The local real estate board had just announced disastrous numbers, but I’m not sure the people who came out to hear me on Tuesday night believed them. Or dared to.

Forty-five minutes east of Vancouver’s core, Surrey is an endless stretch of plazas, big box stores, industrial units and new houses jammed into every available corner. The growth here rivals that which has sprung up around Toronto’s flanks. In fact, add some snow, and this could be Whitby, Richmond Hill or Milton.

Like most of the Lower Mainland, and like the endless burbs of the GTA, real estate defines the community. It’s not culture, architecture, history or jobs that bring people to places like these, but rather big houses at a lower cost than is possible in the city. Still, prices are high and so is debt. The last thing anyone wants to hear is the latest news, used by a financial radical from Ontario to beat them up.

But the facts speak volumes. Sales in this market collapsed by more than half in January, to a point not seen in a quarter century. In all of this sprawling metropolitan area, a mere 762 houses changed hands, while 14,000 could not find buyers. At this rate, there are enough homes to sate buyer demand for a full year and a half, and yet things are about to get far worse.

It’s estimated at least 6,000 more listings will come on the market in the next 80 days, and yet there is absolutely no reason to believe many more buyers will materialize. That will help drive prices lower, and already Vancouver’s homes have lost 16% of their value.

In a city with the highest home prices in the country, which is less affordable than New York, London or LA, where real estate is an obsession often demanding 80% of net income to carry, this is a shocking thought. My audience listened to me say what they’ve seen is just the beginning, that home prices will be collapsing, then flatlining for years. But they didn’t wish to believe it. I saw that in eyes in every corner of the room in this swishy suburban golf club.

I guess Dave Watt has figured that out. He’s president of the Vancouver real estate board and says consumer confidence may be at low tide right now, “but the long-term strength and security of our housing market are beyond the reach of the economic clouds of today.

“Today’s short-term conditions are creating long-term opportunities. Buying opportunities have not been this strong in a decade, with low interest rates, broad selection, and more affordable prices.”

Buying opportunities? He bases that opinion on what, exactly?

Sales volumes in one of the country’s greatest cities have collapsed, even when it is just months away from hosting the Olympic Games, even though mortgage rates have tumbled and even when the average home is now $122,000 cheaper. Clearly the momentum is negative, and it’s growing stronger. For sale signs pepper the landscape and those once-trendy downtown condos are losing value by the day.

Any young buyers naive or manipulated enough to believe Dave Watt’s message and interpret this as an opportunity are walking into the jaws of a property trap. Vancouver real estate is sunk. It now officially joins the other urban sisters of decline.

But, of course, they didn’t believe me.  Mr. Watt’s the pied piper. I’m the rat.


#1 Jeremy on 02.04.09 at 3:15 am

I was there tonight Garth, I thought you put on a good show, I’m not sure I learned anything new that wasn’t on the blog. But I was glad that my wife got to hear it all from the horse’s mouth. We actually sold a condo about three blocks from where you were speaking in Surrey back in 2006 after seeing the value skyrocket by about 50% in a year. Today we rent on the other side of the bridges in Burnaby. The lifestyle is much better (no commuting). Maybe we’ll buy something over here when the prices come back down to earth but I’m pretty happy staying far away from Real Estate for now. Thanks for all the advice, I feel like we are as prepared as we can be for whatever comes now. We just need some of those fancy MREs you have on Xurbia, you know, in case of an earthquake or depression or something. I’m not big on squirrel.

#2 confused and a little crazed on 02.04.09 at 3:44 am

Hi garth,

Though I live in Vancouver, I couldn’t make it to your Thurs Lecture. i drove 1 hour 15 mins from my westend workplace to your Surrey lecture. Rush hour traffic was as long as the US Banker bailout concession stand.

But I made it just as you were being introduced. A lot of what you said on the podium is in your blog but with more meat … more details. emphasis on a few topics and less so on others. I’m glad i came…the last 2 graphs depicting 100 yr growth of housing an the other stocks was enlightening. I actually have been buying stocks since March 2008…all blue chip like Mc D , Barrick…intel.
Companies tht dominaate their industry because we are not as bad as the depression and they made it through.

Of course they are still 30 – 50 % down but i have 3 decades before I retire and I have no debt. . I ‘m a little suprised about the 2 goldbugs comments and promotion of ” BOOK”. But gold seems like a good hedge against printed money but I can’t bring gold coins and buy bread a nd milk from the grocery store. I need bills or a credit card. I wanted to stay and shake your hand but i can see you have had a long day and there seems to be a long line up of supporters with I ‘m sure a lot of question as to what they should do.

But Thank you Garth…your Greaterfool was well receive by a few close family / friends and look forward to checking out your new book in the future when I haave time to read it.

Suprisingly you look taller on Tv and new articles….Ah the magic of media. Take care and I hope to attend your future lectures… Has any of the BC universities requested a lecture apprearance?

#3 Jordan on 02.04.09 at 6:14 am

Hi Garth,

Thanks for the free presentation last night. Although the majority of people are not willing to consider the facts regarding the past and current economic, there are certainly a few of us who appreciate your analysis and have made our own informed decisions as a result.

Denial is a dangerous trait and I think people need to recognize that what you presented wasn’t speculation, the numbers are real. The only speculation is about how bad the situation will get and how long before it begins to turn around.

To the gold bugs, invest in precious metals but in balance. A basket full of broken eggs means you go hungry, that’s what Garth was stating.

Thanks again Champ!

#4 Chris in England on 02.04.09 at 7:20 am

I’m interested in why many of these people come to hear your presentation. Presumably they have an inkling of what you will say, and if they were just going to scoff at it they could do that from the comfort of their homes without travelling to the golf club to hear it. Surely they suspect (if not know) deep down, that what you are saying does make sense?

Was it disbelief in their eyes or fear – or both? I know I wouldn’t be that happy to hear the house I put my neck on the line for was already worth less than I owed on it, and still falling. Highs and lows in England are seized upon by the press and just about every day it is “house price crash” or, in better times “record property price rises”, so we tend to hang all our washing out for everyone to see it 24 hrs a day. The nasty news is never a surprise, just a gradual chipping away at the collective unconscious until everybody “knows” even if they are not looking for the information. I don’t think I recall any situation here where real estate was talked up when it was actually crashing down. If anything, we love to push it over when it starts tottering (news, innit?)

England, where gloom is a way of life!

#5 Bill-Muskoka (N.A.M.) on 02.04.09 at 7:31 am


While our country is being descimated by inept mangement I find there are more pressing issues than real estate to deal with. Have a great time here. See ya!

#6 Mr.Doom&Gloom on 02.04.09 at 7:36 am

I say, bring on the pain. After years of growth, excess spending and mass consumerism, its about time we feel a little bit of the hurt. The herd only learns through experience and thankfully, the “Lesser Fools” learn through Garth.

Also, I live in my parents basement with cash in the bank…..burn baby burn.

#7 Grantmi on 02.04.09 at 7:59 am

Remember Garth!!!

A Rat is only one gene away from a Squirrel!!

Yummm Yummm! Rat Ragout


#8 lotusland on 02.04.09 at 8:32 am

I was there last night Garth. I heard every word. In fact, I thought you went easy on the crowd. One thing you did say that surprised me was that you do not believe the hyperinflation theory down the road. Some economists that I have listended to, who share your views in many areas, are fairly adamant that this will happen. That production will come to a grinding halt ant that when the recovery starts, there will simply be no supply to meet that demand, therefore driving prices up. Further to that, economies that have printed more money than others (relative to other countries) will have to raise interest rates to offset that price rise.

I’m sure I am not doing the argument justice, but could you elaborate a little on why you are so confident that will not be the case. thanks

I said deflation would be followed by inflation, but not hyperinflation, and not soon. If the US monetizes its debt, then its currency will be toast, as will the global economy. This is not a theory that has legs since it will not be allowed to happen. — Garth

#9 J.B. on 02.04.09 at 8:37 am

Garth, they may not have looked like they got the message, but you got them thinking and that’s all you can do.

#10 Steve on 02.04.09 at 8:57 am

This article says it all for those who think we are better off than in the U.S. Look out below!

“Canadians’ debt-to-disposable income ratio, now at 130 per cent, exceeds U.S levels…”

#11 Amy in the 'Peg on 02.04.09 at 8:58 am

It’s okay to be a “rat” Garth, they are always the first ones off a sinking ship!

I’m a rat too. (chinese astrological sign)

#12 Midas on 02.04.09 at 9:08 am

Anywhere North of King George Hwy. is a dump in Surrey. I fully expect prices to hit 1980’s levels in most parts of Surrey except South Surrey and White Rock. The latter two will see a decline of 70% or so from their lofty 2007 highs.
Expect a mass exodus from the Fraser Valley to points East. All vultures get ready for the carnage beginning this year and extending well into this decade, maybe even the next one.

#13 dd on 02.04.09 at 9:08 am

You would be the “financial radical from Ontario” … the “rat.”

When the real estate boards are piping “Today’s short-term conditions are creating long-term opportunities”, you are not playing the game. Wink Wink.

I guess that we haven’t had a recession in such a long time people tend to forget that even real estate prices do down too.

#14 U.B.A.B. on 02.04.09 at 9:23 am

An man once said that his immigrant grandfather who came to Canada from Italy taught him the most important thing about surviving this world.

He said,
“Do you know what happens when you win the rat race?

Nothing, your still a rat…”

#15 Nebbio on 02.04.09 at 9:29 am

I assue that the next few months will either prive you right or wrong Garth. I wouldn’t bet against you. I have the money and the desire to buy a new home, but I wouldn’t touch this market with a 50 foot pole. I live in Port Credit and I have seen homes for sale languishing for months. I can only imagine what the Spring will bring. I am staying in my rental unit until this storm has passed.

#16 MaCs on 02.04.09 at 9:34 am

Hello Garth,
Denial can be unbelievably strong in human psyche. Words might be diluted through competing media, but images remain. I have not been to any of your lectures (yet) but I you haven’t done it you might want to show photos of never ending urban landscapes showing the “for sale”, “new price” signs.

#17 Tony on 02.04.09 at 9:34 am

Garth says “But, of course, they didn’t believe me. Mr. Watt’s the pied piper. I’m the rat.”

No, you’re not the rat. Maybe you’re just pushing a little bit too hard. Due to the media exposure you have, you do have influence over the sheep (evidenced by your many clones in this blog). You’ve stated your various positions on how bad it will get, and now you’re on tour to help fulfill your prophecies. Maybe the people just get that.

#18 smwhite on 02.04.09 at 9:36 am

“Today’s short-term conditions are creating long-term opportunities. Buying opportunities have not been this strong in a decade, with low interest rates, broad selection, and more affordable prices.”

The buying opportunities are going to continue for another decade, which is what was left out of that para.

So if the average home was in the $750K area a year ago and now a undeniable 15% drop? That’s $100K, on average, and in only a year!

Thanks Mr. Housing Bubble!

So much for real estate being that “rock solid” investment.

Maybe a petrified turd…

#19 David Bakody on 02.04.09 at 9:55 am

The truth is people are not buying …. not buying much of anything ….. jobs security is gonzo …”BIG TIME” people are silent and scared. Think, think and think ….. Obama is about to put a limit on salaries of CEO’s who accept government money … hello? then the CEO’s will downgrade other salaries .. then other companies will do the same …. then they will pick on athletes ….. any bets? New world order is now if full progress …. so hang on it’s going to be one hell of ride to the bottom …. and in 2015 things will settle out at a lower level …. just in time for a new round of greed …. or simply put, another trip to the Casino but this time it will be different they will quit while they are ahead ….. yea right!

#20 Harry on 02.04.09 at 9:56 am

I really do not understand why anyone would buy right now.

The realtors’ keep saying ‘buy now, before you miss this great buying opportunity’!

But why is everyone so paranoid that they might miss ‘The Bottom’?

When housing eventually hits the bottom, is anyone expecting that prices will immediately spring up 5%, 10%, 15%, 20% in the first year after the bottom and that they will miss their opportunity at purchasing an affordable house?

Maybe I am wrong, but when housing prices flatten out I expect that they will remain flat for some time to come, maybe a couple of years? But it will not be until I see that flat bottom hold, for a number of months in a row, will I consider purchasing a house.

Now my purchase of a house will be for the purpose of calling it my home (I rent right now, I sold my old place a year ago) and not as an property investment. Maybe if you are an investor/landlord it’s time to start keeping an eye out for deals … that I don’t know, but somehow I still doubt that it is.

#21 JOHN on 02.04.09 at 9:59 am

Hey Garth,

Can you expalin to me what is going on with the Edmonton RE market. It seems that we are stabilizing, no doom and gloom here.

#22 whiterock on 02.04.09 at 10:03 am

Had a superbowl party this past weekend and one of the revellers was a bit late as he was out with his daughter and son in law who were looking for a townhouse(in the Langley/Surrey area) I didn’t get to talk to him about this during the game but apparently he had been talking to others about how good a time it now is to purchase real estate. This is a person involved in home renos and he has noticed a slowdown in his business. Another individual there was telling me about a first time buyer looking for a home and he too was quite taken aback when I suggested now is not the time to buy. So the reality of the situation here seems not to be apparent to quite a few people. But it will.

#23 Cornholio on 02.04.09 at 10:04 am

I’m kind of fond of rats myself. They are opportunist, sly and scurry at the first sign of danger. Survival goes the the swiftest.

#24 Patrice on 02.04.09 at 10:18 am

Nice article.

This is Canada.

We are not USA.

We are different and our banking system is different.

What happened in the USA and England will never happen here.

Because Canada is soooo different than the US.
We are so much better.
We are not affected by what happen to inferior countries like the US and all of the European countries…

Is this the last idea people hang on to?

How many times (if at all) did you hear this while you were in British Columbia?

#25 sideliner on 02.04.09 at 10:21 am

People who have a hard time understanding the facts rely on the opinions of others. When opinions based on the same set of facts are so polar opposites, who are you going to believe? There is often no comfort in the truth. Shame on Dave Watt.

#26 RS on 02.04.09 at 10:26 am

Well Garth, what did you expect – no one wants to believe that their only investment is losing money!

I have always believed you and this is why we continue to rent – even though all our friends are “homeowning snobs” who think we are just throwing our money away. Boy are they in for a surprise!

#27 Joren on 02.04.09 at 10:30 am

Speaking of Dave:

and this line from a mortgage broker:
“I think there is going to be a resurgence in the first-time homebuyer market in the spring. With continued downward pressure on interest rates, I think a lot of people are just going to go for it.”

I’d like a little of whatever she’s on.

#28 Bailing in B.C. on 02.04.09 at 10:51 am

Remember Garth, the rats are the first off a sinking ship, and this sucker’s going down.

I’m looking forward to seeing you in Vancouver tomorrow. I’m bringing a friend who is up to her eyeballs in RE. Brand new house (450,000?) rental duplex (800,000?) rental house (350,000?). I tried to get her to see the light months ago. She’s probably lost $250000. Perhaps tomorrow night will open her eyes.

I’m hoping tomorrow night will also help me decide if I should list my house. Its paid off thanks to selling a Kamloops rental property in the Summer (hats off to you Garth!). The house has a suite which we rent for $900 per month. So we basically live for free. To rent something suitable would cost about $1400 per month. From a cash flow prospective we should keep the house, but perhaps we should take the hit and preserve our equity as more than 80% of our wealth is in the house. Squamish is one of the places in greater Vancouver that when up the most, which makes it the bubblyist of the bubblyist. If we could sell the house I would like to buy land and do the self sufficent thing. All my friend think that I’m mad, but I’m starting to think I’m one of the few that’s sane

#29 TUT on 02.04.09 at 11:02 am

Some real numbers from personal anecdotal experience.
All properties cited are 2 bedroom, 2 bathroom condominiums with 1000 sqft of more

New Wesminster, BC
Listed June 2008 at $350,000, sold December 2008 at 271,000 (-22%). 245$/sqft

Port Moody, BC
Heritage Mountain
Listed November 2007 @ $430,000, relisted September 2008 at $350,000, sold November 2008 @ $302,000 (-25%), 212$/sqft.

So if prices are falling another 13% in 2009 we may expect a reduction above 30% from peak. Considering that this forecast is, probably, very optimistic, the actual drop may well be in the 40% range. If the situation persists for another one or two years the consequences for everyone, specially those families renewing their mortgages, may be tragic.

I am not sympathetic with the reckless dudes that got themselves in this mess expecting huge gains taken from other citizens with no special contribution to the general welfare, but I’m really sad for those young families that were induced to enter the trap by those who must know better, including realtors, banks, authorities and media, but chose to hide the reality. Then the tune was:” Real state never goes down!”, now is :”How we may have known? “, without remorse I’d say.

The circus goes on and we may expect a few additional clowns to show in the arena, while the band plays louder tunes, to distract the attention of the public for a little while. Then…..

#30 a renter on 02.04.09 at 11:28 am

to #8 Harry…

Totally agree with you. Potential buyers need not obsess about timing the bottom and “pouncing” at just the right time.

Even when we hit bottom, which is years away, there won’t be a sharp bounce so there’s no rush. Now that its commonly accepted that post-2001 real estate was a bubble, buyers will be cautious going forward.

So buyers, relax, take your time, resist the urge to jump on something just because it looks like a “deal” in 2008 terms. The true “buyer/s market” hasn’t even commenced!

#31 Alberta Ed on 02.04.09 at 11:31 am

Garth, you really need to come to Calgary. We see For Sale signs springing up everywhere, sales are tanking even according to CREB (who fudges the figures, nonetheless) , and sellers and realtors are still in denial, while the city council and provincial government haven’t got a clue. A dose of reality might help.

#32 Steve on 02.04.09 at 11:31 am


I just finished your book … it’s and excellent read.

Thanks for writing it!!!!!!!!!!

There are three thinks I was wondering if you’d comment on?

1. the looming defined-benefit civil “servant” pension crisis that will make taxpayers the servants of the retired civils; and

2. the impending MASSIVE increases in property taxes by municipalities to meet the insatiable greed of public employee unions, special interest groups and politicians who need more and more

3. the HUGE additional supply of both real estate and stocks that will be coming soon, to meet boomer’s redemptions as they cash out of the markets for retirement lifestyle changes



#33 The Tallyman on 02.04.09 at 11:34 am

Garth is a rat with a message:

La la land… your cheese is past it’s expiry date,
a rat won’t even touch it!

#34 squidly77 on 02.04.09 at 11:35 am

john..perhaps the below graph will help you to understand whats happening to edmonton home prices

#35 JO on 02.04.09 at 11:39 am

Hey Garth, the sheeple are, as usual, in denial.

Vancouver will lead to the downside as you allude to. It is a national disaster in the making. Imagine even an inevitable correction in bond prices which will raise rates anywhere from .50 to 1 full point…and this assumes the inevitable collapse in long bonds does not happen this year..a risky bet at any time..

You have high indebted consumers, with a large portion of that debt tied to the value of an inflated asset, and the beginnings of a deflationary cycle that is leading to sharply rising unemployment..yes you are right..this will get fugly.

IMO – We need to start getting out the message about the role of CMHC/NHA, CDIC and the fractional reserve lending policy overseen by the BofC/Fed had in getting here. These are the core issues. Blatant market distortion by micro managing rates and using gov’t programs to maximize the amount of credit created.

Keep up the good posts

#36 K on 02.04.09 at 11:55 am

Heres the lastest and greatest realtor stunt out in Victoria. They are all quoting assessment values for 2009.I do recall G. Campbell froze all property assessments at the 2008 level last fall. This was to prevent a deluge of appeals on overpriced property and prevent overtaxing on the already over burdened owner . With the 2009 assessment much higher than the 08 assessment I must ask myself what this is about. I said it before and will say it again ….Property assessments are a crock of s**t. I would never make an offer on any property out here based on assessed value. In good times or in bad.The realtors will tell me that I can’t go much below assessment value …. WRONG….Try going about 20 to 50% less all depending on what kind of shape it’s in . My guess is that in these troubled times you will get it.

#37 JO on 02.04.09 at 11:56 am

Steve, agree with your comments.

Pensions will be the next crisis and IMO, no later than end of this year. Expect many large pension funds, led by the civil servants, to come knocking on the taxpayer door. Really quite one factors in how much economic growth, lost jobs, etc that all the extra taxes will drain out of our pockets as a result of this bailout/”stimulus” garbage.

Expect to see political polarization between working Canadians (inlcd whatever remains of the “middle” class) and the retired folks. Some organizations are already attempting to make changes that amount to bailout out those already or about to retire at the expense of younger people. Teachers in Ontario and the Actuaries board have made or recommended changes that attempt to keep younger workers in DBP plans to help maintain elevated retirement benefits for retired folks..either way, it is inevtiable that many DBP pensions will have to be cut at some point.

Our governments have been operating as BMW models or Lexus versions…they will find out that raising taxes in the midst of a multi year crisis, led by housing, will lead to massive tax revolts. They will be forced to cut back to the Honda Civic model of gov’t.


#38 POL-CAN on 02.04.09 at 12:06 pm

Toronto market update – it seems that nothing over 500 K is moving and sellers are getting antsy

Jan 8 2009 $989,000
Jan 14 2009 $889,000
Feb 4 2009 $859,900

Glub, glub, glub…….

On the other hand… This one will probably go quick due to location and price….

#39 Tony on 02.04.09 at 12:13 pm

#6 Mr.Doom&Gloom:

I say, bring on the pain. After years of growth, excess spending and mass consumerism, its about time we feel a little bit of the hurt…

Also, I live in my parents basement with cash in the bank…..burn baby burn.

Hmm…Just wondering if you’ll still be feeling like this when you become an adult, move out of your parents’ basement and buy a house? I’m betting you won’t.

And forget about outliving your parents and getting their house! I’m going to see to it that your social assistance rep tells them about reverse mortgages, you pathetic clone…

#40 Future Expatriate on 02.04.09 at 12:16 pm

” I said deflation would be followed by inflation, but not hyperinflation, and not soon. If the US monetizes its debt, then its currency will be toast, as will the global economy. This is not a theory that has legs since it will not be allowed to happen. — Garth

Garth, can you please tell us WHO is not going to allow this to happen, WHY they wouldn’t particularly celebrate for joy if the US (a troublesome offense contractor masquerading as a Democracy) was utterly destroyed, and exactly HOW they have the means and how they intend to stop it? And also how what the non-US government Federal Reserve is doing now (flooding the market with trillions of newly printed bailout dollars) isn’t going to achieve the exact opposite?

That’s the only thing I seem to be missing here, and forgive me if I read it in your book but missed it there; I did read it really quickly because I couldn’t wait to get to the end to find out how everything turned out!

#41 Steve on 02.04.09 at 12:33 pm

Garth, I forgot a few things …

As governments get squeezed and continue to do the wrong thing with bailouts, deficits and increasing the size & cost of Government, rewarding bad, inefficient, unethical behaviour and generally stealing people’s money, I believe they will:

1. implement restrictions on withdrawls from bank & investment accounts (including many bank holidays)

2. introduce a capital tax on all financial assets starting at between 5 & 10% per year and increasing from there

3. significantly increase property, income, sales, estate and other taxes (now known as “revenue tools” for “investment”)

4. increase existing (and widely expand) user fees for anything and everything you can imagine

5. make ownership of GOLD illegal and confiscate whatever is out there under the threat of jail tiem (there is a great paper trail for them to find you)

6. inflate or die will become the motto and they will do all they can to inflate our way out of debt

7. the ensuing devalutation of our currency will be followed by a significant reduction in our standard of living

8. the theft, rape and destruction of anyone who has anything, by Government, will be done in the name of the public good and patriotism (to help those less fortunate) and in the name of safety, for the kids, or for the environment

9. criminality, ineptness recklessness and stupidity will continue to be rewarded at the expense of those who have been prudent, smart, thrifty and wise

10. we will end up owing so much money (squandered by our Governments, unions and in the effort to support our welfare state) that our children’s grandchildren will not be able to pay it all back


#42 Steve in Kitchener on 02.04.09 at 12:40 pm

Hey Garth,
I just finished your new book and enjoyed it very much. I agree with your assessment of the real estate market in this country. I think the biggest problem is the fact that people don’t want to believe that their house will go down in value since that would make them a “greater fool”. I sold my place in Toronto in the summer and came to Kitchener to rent. Everybody I knew thought I was insane. The sad thing is people don’t have a proper gauge of how bad the market is, they keep telling themselves that my house/condo will sell for more than my neighbors since I have done X to it. When you have money in the markets it’s really easy to see what it’s worth, it’s right there on your statement.

I have friends who just sold a condo in North York. The asking price was $240,000. They went through four or five offers (and six months) before they ended up selling for $206,000. Now you think this people would know that prices are falling but instead they bought another condo for 260K. I tried to tell them they’re insane but some people can’t get past the thought of renting. When I worked at a bank as a financial advisor I tried to warn people about the risk of getting a 0/40 mortgage but not one person took my advice, everybody wants everything now. I think after this round of price drops people will think long and hard about buying real estate. It’s very difficult to get proper advice from real estate agents, mortgage brokers etc.since their livelihood depends on them selling products to you.

#43 sobroke on 02.04.09 at 1:09 pm


Same thing in edmonton, i dropped my house price 100g and i didnt even get a phone call, so im thinking of doing it again. Looks like this is the start of the big price cuts,

#44 David Bakody on 02.04.09 at 1:15 pm

#42 Steve in Kitchener on 02.04.09 at 12:40 pm

Hey Steve I lived in Kitchener many years ago when interest rates were close to 20%, found a nice home in Forest Hills for 15% that tied me over until I returned East. Good people and a good time out at some really great restaurants ….. and loved those gas wars. But heard they built like crazy and fell into the same trap that Garth is talking about …. now I am hearing about some sad cases …..

#45 Anxiously Waiting the Housing decline on 02.04.09 at 1:18 pm

I am actually one of a few that are waiting a year to purchase. Just recently have become consumer debt free and am saving like crazy for a downpayment. We are looking in the North Richmond Hill, ON area however prices are still really steep… for my liking…. the builder even increased the prices in Sept 2008 and has not lowered house prices in there new phase.

What is your opinion on the housing market in that area? Will there be a significant drop in prices?

We want to buy in that area to move closer to family and timing is an issue for registering my son for school… will I see a drop in that area by Feb 2010 or should we be waiting longer?

Your insight would be helpful as your blogs always are!


#46 Ste-Anne-de-Bellevue on 02.04.09 at 1:19 pm

– Foreclosures in Quebec up by 39% in 2008 compared to 2007.
– Foreclosures for the month of January up by 30% compared to last January.
Many might think that the bubble is only in the west, well house prices more than double here since 2002. Now just like the rest of Canada, sales collapsed, houses have been sitting on the market since summer 2008. In westisland, prices went from $335,000 to $289,000, still unsold.

link is in French:

#47 dd on 02.04.09 at 1:23 pm

#43 sobroke on 02.04.09 at 1:09 pm #38

Calgarians will face with soon enough.

#48 Patrice on 02.04.09 at 1:25 pm

Steve; you are insane.

This is a financial crisis.

This is not the end of the world as we know it.

Chill; step back and leave some space for perspective.

#49 dd on 02.04.09 at 1:27 pm

#42 Steve in Kitchener

“some people can’t get past the thought of renting.”

You said it. The real estate machine has told society that if you rent you “throwing your money away.” This has been the case for at least the run up, however … off the cliff we go.

#50 Keith in Calgary on 02.04.09 at 1:29 pm

Just a though here……more of a SWAG…..

Canadian banks are undercapitialized and in trouble like very other bank out there on the globe. So to suggest otherwise is denial of reality. CIBC is the worst off at present.

Our government can’t bail them out openly as it looks bad and exposes the man behind the curtain…..for proof of this witness the $75 billion CMHC mortgage purchase, which was actually a capital injection in disguise.

So, create a tax free savings account…..and assume that you’ll have somewhere between 5-10 million of our 33 million population who put up to $5K in the bank of their choice.

Voila….another $25-50 billion bailout……

#51 dd on 02.04.09 at 1:29 pm

#6 Mr.Doom&Gloom

“Also, I live in my parents basement with cash in the bank…..burn baby burn.”

Wow … can i move in too?

#52 dd on 02.04.09 at 1:32 pm

#36 K on 02.04.09 at 11:55 am

“Property assessments are a crock of s**t.”

Assessment are for property taxes … nothing more and nothing less.

#53 dd on 02.04.09 at 1:34 pm

#21 JOHN,

Tell us what the layoffs are like in the oil and gas sector and we can tell you were house prices are going (high house prices or not).

#54 Nick on 02.04.09 at 1:35 pm

#32 Steve:

According to a May, 2008 publication by the Fraser Institute, BC and Ontario have no unfunded civil service pension plans and the Yukon and the Federal Government both have pension surpluses. According to them, the only province that’s really in trouble is Quebec. Not really sure about municipal governments though, they might be worse off.

Pages 19-21:

#55 Jelly on 02.04.09 at 1:35 pm

Chris in England,

There was quite a bit of denial in the UK just like here a few years ago, probably still is. When I talked about the strong possibility of a real estate bubble in Canada as well as the UK, people just refused to believe it. (relatives of mine)
There was too much, “My daughter’s house has gone up $100,000 pounds already”. I know this thinking feels a lot better than losing money but still, I would want to be warned had it been me. The truth hurts anyways…
It is frustrating when people you are trying to help get out of debt before property starts plummetting, totally do not even give it a chance.
I mean all you have to do is think about how average people can afford these ridiculous prices that are supposedly going to keep going up. Looking historically at data is not difficult either, I mean all you need to do is look at a graph of the past booms and busts, it is certainly not rocket science. The UK (and Europe) drank from the same koolaid that the US did and are quickly being brought down to earth.
It would not hurt us to be less consumeristic but the psyche of us all will be effected very much so the next time we take out our wallets.

#56 dd on 02.04.09 at 1:39 pm

#28 Bailing in B.C.

“I’m hoping tomorrow night will also help me decide if I should list my house.”

The time to sell that house was last summer. If you haven’t figured it out yet and why you have the intestment … well it is last call. Your gain is decreasing by the day.

#57 Mr.Doom&Gloom on 02.04.09 at 1:51 pm

#39 To Tony

The reason I have been living in the basement is because I have been waiting this whole non-affordable housing bust out. I certainly plan to buy a home and buy soon (relatively) – but thanks for generalizing and missing the point by a mile.

There was once a time where some children stayed at home long enough to build a nice downpayment, get some financial security and then at least have some equity when moving into their first home. Obviously you’ve missed the message of this whole site – that the opposite of what I’m doing (by that I mean overleveraged) is what got us into this mess in the first place. Now its just time to play your cards right.

So yes – let it burn. I’m a vulture just waiting in the wings…..

#58 dd on 02.04.09 at 1:55 pm

Sprotts Cheery outlook for 2009:

#59 colette on 02.04.09 at 1:57 pm

This might not be the best economic strategy but how about all those who are hopelessly in debt just walking away? Start over just like the do over.

Just think of all the disposable money they would then have to plow into the economy either by investing or spending…for that seems to be the strategy that the big boys are counting on for a turn-a-round…only thing is they just don’t get that nobody has the money to spend or save because they are spending every cent on living…and in order to live they had to get into debt.

And you know with all the executives who made and I am sure still have their tidy sums sitting safely somewhere who have gotten their do over why the hell not for the rest of us paeons?

#60 smwhite on 02.04.09 at 3:08 pm

#40 Future Expatriate

A Paul Volker style response we curb any hyper-inflation.

The one thing that a lot of people/analysts that predict more then just asset deflation are missing, was the finite amount of money able to be produced by the federal reserve in the 30’s, because the currency was pegged/backed by their own gold holdings, and if you didn’t have gold in your vault, you didn’t print money.

Therefore the government confiscated what they could to enable printing of more money as the public hoarded what little(gold and cash) they did have.

We don’t have that problem today. We do have the problem with loose money printing standards, but I figure that when they start to realize serious inflation(Especially in the non-core-CPI), rates are going up, way up!

#61 Carole AB on 02.04.09 at 3:20 pm

The Great Consumer Crash of 2009
By: James Quinn, the Wharton School, University of Pennsylvania

“It is easy to ignore the storm if you look at the opposite horizon. When the storm reaches your location there can be no more ignorance. I hate to tell you , but the storm has reached your location and it is a category five hurricane. The levees are leaking. Ignore it at your own peril. The 6000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing days are coming to an end. The American consumer will not go without a fight. (nor will the Canadian for that matter!)

A well documented read

#62 smwhite on 02.04.09 at 3:22 pm

#57 dd

“In 2009 we have the US dollar Ponzi scheme – no contest.”

Well that was a happy tale, but one that needs to be understood. I agree 100% with Mr. Sprott’s analysis that the USD and the whole fractional currency system is one big Madoff ponzi play…

Madoff was just practicing US government finance…


#63 George on 02.04.09 at 3:22 pm

Hi Garth,
I’m looking to purchase some property in the kootenays BC. The realtor that I contacted had lowered his price after almost a year on the MLS. He told me there was no such thing as 0/40 mortgages. I called him on it and emailed one of your crystal ball calls back in July 08 concerning 0/40’s. He said he knew all about you that you had come through and he had attended one of your talks. Is this true have you been through Nelson?

#64 mcfly on 02.04.09 at 3:28 pm

Hi Garth
There are laws against misleading advertising by Realtors… why not the same with representation of acurate Board stats?

#65 Cendrine on 02.04.09 at 3:44 pm

Garth, please explain what is meant by the phrase “the US monetizes its debt”? I’m afraid I am not financially literate. I’d appreciate a short summary of the mechanics of this and how it would create inflation. Thanks in advance…

#66 Eduardo on 02.04.09 at 3:51 pm

Garth et al,

What do you guys think about the possibility of spending part of the multi-billion $ Heritage fund in Alberta that is intended to buffer against bad times?

#67 JHO on 02.04.09 at 4:07 pm

i’m catching you tomorrow night in Van – can’t wait. I’ve even roped in two unwilling friends into tagging along to hear what you have to say – both are young (late 20’s) like myself, but are anxious to get on the Van real estate train despite all the gloom and doom out there.

i’ll be the bra-less chick in the back with sharpie in hand.

#68 kitchener1 on 02.04.09 at 4:33 pm

#47 Patrice

Steve; you are insane.

This is a financial crisis.

This is not the end of the world as we know it.

Chill; step back and leave some space for perspective.

For those couples who are in or going to be in a negative equity situation when they lose their job it will the END OF THEIR WORLD AS THEY KNOW IT.

Its easy for us to renters or those with houses paid off the sit back and relax, not the same for someone who brought a house with nothing down who is on the verge of losing it and going bankrucpt.

Just give it a few months by mid summer you will be seeing articles about couples like this in the Globe and the Star

#69 Eduardo on 02.04.09 at 4:57 pm

“Hyperinflation is the product of a slow, but continuous loss of a currency unit’s buying power, degraded political expediency motivating economic decision making and total degradation of the business community in the condition of a locked credit base.”

–Jim Sinclair

#70 dd on 02.04.09 at 4:58 pm

#58 colette

This might not be the best economic strategy but how about all those who are hopelessly in debt just walking away? Start over just like the do over.

Umm … Yes and when you complain that your mutual funds and stocks are scoring negative returns because people are walking away what then? Writing off debt writes off income for others. Somone will have to pay fo this. It will be through layoffs (decreased spending, and government bailouts (higher taxes).

#71 Ultraman on 02.04.09 at 5:04 pm

colette, that’s call a Mulligan

“In golf, a mulligan is a retaken swing, usually due to a previously errant one.”

#72 North Vancouver Citizen on 02.04.09 at 5:13 pm

#40 Future Expatriate

Deflation 101

Fed is printing money but the banks aren’t lending it out.

…so there is no inflation, let alone hyperinflation.

the Fed will print more money but only after more deposits of US dollars in US Treasuries.

Which explains why the US dollar remains high visa vie other currencies.

Anything and Everything will continue to deflate…except the U.S. dollar.

…Gold being horded around the world will collapse once gold is used to buy food.

…Hope that helps…

#73 Comrade Okie on 02.04.09 at 5:20 pm

I’m kind of fond of rats myself. They are opportunist, sly and scurry at the first sign of danger. Survival goes the the swiftest.

#23 Cornholio

Oh my oh my. Cornholio, Cornholio where for art thou Cornholio?” And here I thought I had an odd sense of humor.

Actually at first glance I thought you might be opening a discussion on politicians and CEO’s.

#74 Darryl on 02.04.09 at 5:27 pm

Thanks for the uplifting link. When you see a respected company like Sprott write an article of this nature, can’t help but worry. And Sprott is a financial advisor. At the end of the paper, I couldn’t help but wonder if there is any place safe for your money. At least they are honest. They should get into RE.
I hear of some people selling thier homes and sitting on the cash for a day when prices are lower.I hope they have the money in a very safe place. I have my home paid for and know that on paper my wealth will go down over the next years. I still feel safer knowing I have a home . Less people have the chance to get thier greedy little hands on my hard worked for assets than in the financial system . Any investment that I have that is managed by others is down by more than my house is. and an equity will not keep me warm and dry. Just as a rant , I remember many times at this time of the year financial advisors would call to sell thier investments. I would tell them that after I paid my mortgage off I would call them . They would always say in not so many words that I was a fool. Glad I ignored them.

#75 Maurice Troy Lamont on 02.04.09 at 5:39 pm

House prices RISE in Winnipeg!!!

Resale homes market in city one of the bright lights on Prairies

By: Murray McNeill

1:01 PM | Comments (1)

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Winnipeg’s resale-homes market was one of the bright lights on the Prairies last month despite an eight-per-cent drop in unit sales, according to new figures released today.

The Winnipeg Realtors Association said 524 properties sold last month through its Multiple Listing Service (MLS). Although that was down eight per cent from the 570 homes that sold in January, 2008, the drop-off was small in comparison to the declines registered in most other Prairie cities.

The WRA said residential detached sales were down 49 per cent in Calgary, 40 per cent in Edmonton and 29 per cent in Saskatoon.
And although fewer homes changed hands, the WRA said the dollar volume of sales last month in Winnipeg was still one per cent higher than in January of last year, at $96.5 million compared to $95.9 million.

Homebuyers also continued to have more properties to chose from, with new listings up 13 per cent from a year earlier and active listings up more than 50 per cent.
“Winnipeg remains a very affordable and stable housing market with more choice and availability of listings in a number of years,” said WRA president Deborah Goodfellow.

#76 Bottoms_Up on 02.04.09 at 6:08 pm

Apologies if previously posted:

(Ottawans finally getting the message…)

#77 Keith in Calgary on 02.04.09 at 6:37 pm

#61 Carol AB……

That was a great read……thanks for posting it. It nicely lays out for the unaware, what many of us here already knew……

#78 Bottoms_Up on 02.04.09 at 7:03 pm

#30 a renter on 02.04.09 at 11:28 am
well said.

Also, it makes me sick to see sales down but prices up. This is definitive proof that people believe ‘real estate prices always go up’. Prices will not reverse in cities such as Winnipeg or Ottawa until the natural forces of supply and demand outweight the stupidity of greater fools…

#79 Bottoms_Up on 02.04.09 at 7:25 pm

You want to see the result of someone smoking too much crack?:

#80 Jim Tuba on 02.04.09 at 7:34 pm


#81 Carole AB on 02.04.09 at 7:35 pm

#52 DD & John

Edmonton layoffs..don’t know stats but will this help?

All but 1 upgrader project shelved.
Precision Drilling stock below $5
Some Oil & Gas contracts cancelled including some of my husband’s and friends
40% of Albertans worried about losing job in survey
Highest job losses have been in Alberta across country
“20 welders a week coming in looking for jobs at one smaller welding company near Edmonton.”

On the positive side word is drilling companies do not want a repeat of the 80’s (Nisku ghosttown) where all the good help left and were hard to find when things started up again…

#82 Da HK Kid on 02.04.09 at 7:39 pm

No RE market will be exempt from this correction. We are talking global realignment here people!!!

Here is a very strong source, the latest Case-Shiller Home prices index. It’s a must see and read at it clearly shows housing already declined to 2004 levels on avg.

Peripheral markets are just lagging including Canada who I believe will take at least an avg. 30% haircut when all this is done (end of 2010)!

As long as there is no recovery, as long as people keep loosing their jobs at an alarming rate, as long as there is oversupply of housing and as long as defaults on RE continue, the prices will keep sliding.

Remember, at the end of all of this and I repeat 40% of the worlds wealth gone already, who will have any money to buy RE AND those who have money, will you A/be able to meet the banks 30% down min. & B/see it as a good short term investment.

Prediction again, when we find a bottom maybe 2010-2011, will we be able to buy and if so if we are the few how can housing prices climb. I say flat for first 2 years after bottom then VERY SLOW AND LOW for year 3-5 maybe 7.

#83 Bonnie N BC on 02.04.09 at 7:46 pm

I guess the greatest Ponzi scheme is real estate but I think there is another game afoot.

The ability of average Canadians to accept that spending for us must mean balancing the budget. No frills, no thrills.

The first time I travelled outside Canada was in 1979 to Hawaii. We saved; foregoing dinners out, rolling quarters and decided to make the exotic trip (for us) after 18 months of saving.

It should occur to all of us that we have been living the good life all these years and a trip to Hawaii, so not on the radar, is an example of us looking to a lifestyle we bought with dreams on a beer budget.

It was an illusion. New cars, new clothes and granite counters with an annual trip to exotic places. Spend, spend spend.

We are not entitled to our entitlements – we are who we are – consumers lost in a desert of debt.

I do not regret my past but I am absolutely determined to follow my parents’ example of fiscal management.

Pay as you go.

#84 dekethegeek on 02.04.09 at 8:00 pm

#56 Mr Doom & Gloom
Aren’t you the same guy a few issues back who was bragging about, ” working as little as possible because it doesnt matter” ?
And you live in your parent’s basement to save money.
Obviously you learned nothing from them, since they worked hard to buy a house and shelter you.
Waiting for the inheritance are we? Lucky baby.

#85 neutral on 02.04.09 at 8:02 pm

Its easy for us to renters or those with houses paid off the sit back and relax, not the same for someone who brought a house with nothing down who is on the verge of losing it and going bankrucpt. – Kitchener1

If the renter can’t pay he/she will be be kicked onto the street within 10 days. (BC tenancy laws). If you can’t pay the mortgage, the bank can give you some brake (3-6 months). Renters are not in better position, once they loose the job.

#86 Maurice Troy Lamont on 02.04.09 at 8:09 pm

So…house prices are GOING UP in Winnipeg AND Ottawa!!

Some housing bust, huh, Garth? LOL!!

#87 Bailing in B.C. on 02.04.09 at 8:11 pm

#55 dd
Yes, of course Summer, or more accurately Spring would have been the time to sell if my house was simply an investment. Selling the investment property was an easy decision. I’d made 100% on my investment and it caused no disruption to my life (only my tenants, unfortunately).

Selling the family home is another decision altogether. Yes it’s an investment. I didn’t buy it to lose my shirt. But at 37 years old, it’s paid for. I can live in it and grow food on the land and continue to collect rent. Then it dosn’t matter what it’s worth. This is the stress free (read lazy) way of dealing with it
If I sell, I will end up with more money. My real problem is deciding if thats my goal.

That said, if I had less than 50% in my property it would be a no brainer. I would have got out months ago.

#88 dekethegeek on 02.04.09 at 8:20 pm

#6 Dr Doom and Gloom WAS bragging 6 issues back
( One Giant at a Time, comment #71.)
So how is the PS3 gaming going anyway?

#89 Rog on 02.04.09 at 8:20 pm

Hey Garth,

Long time reader first time poster.

Wanted to say a big thank you for speaking the truth, unfortunately it is a rare find nowadays.

I wish I could attend your lecture in Vancouver tomorrow but I am working.

Could / Will you be filming and posting any of the lectures on you tube or somthing similar for those that can’t make it, and for those that are not in the area.

Thanks Again!

#90 Jelly on 02.04.09 at 8:47 pm

Bottoms Up,

That is nothing, you should have seen the 2.5 MILLION dollar house on Lake Bonavista in Calgary a few months ago. It is hardly a lake (small and manmade), the house was dated and needed work.
All that for a house in the boonies, far away from downtown.
Now, THAT person was smoking crack!
$200,000 seems cheap to Albertans for the junk you get here.
I know I would rather wait to buy in Cali when it bottoms out, in a prime location too.
Calgary weather totally sucks, you just hibernate during the winter, over rated for sure!

#91 Jelly on 02.04.09 at 8:50 pm


That is total garbage, why don’t you wait a bit before you start gloating. Winnipeg and Ottawa will go down too, they are just behind the trend. Winnipeg’s bubble was way later than Alberta’s. As for Ottawa, it wasn’t as overpriced and bubbly so it won’t crash as hard, but it will go down…
Just wait…

#92 john on 02.04.09 at 8:56 pm

Canada could lose 325,000 jobs this year: TD Bank
Last Updated: Wednesday, February 4,
……….a pretty good indication of where we are headed–squirrels may become endangered.

#93 OntarioHouse on 02.04.09 at 9:02 pm

In some cultures parents dont kick their kids out of the house as soon as they turn 18. They love their children and want to help them save money. Nothing wrong with that.
Yes a renter is also in the same postion if they loose their job, only they dont owe nothing to nobody. No bankruptcy, no forclosure.

#94 double mike on 02.04.09 at 9:42 pm

#84 neutral

1. Usually rent is much less than mortgage, so it’s easier to keep some rainy day reserve.

2. If a renter loses his job he can easily find a really cheap rental place 100 km away. Not a big deal driving for an interview from time to time. It can save up to 70% monthly. And if you got lucky and found a good job you can move to the nearest area.
I haven’t lived more than 10 minutes drive away from my work desk in last ten years.

#95 KJ on 02.04.09 at 9:49 pm

Garth thank you so much for your hard work and your excellent books. In your new book, After The Crash you mention that Kelowna’s Real Estate Market prices have been going down consistently @ $10,000 per month for the last seven months. We were actually planning to buy a home in Kelowna and move there in the summer of 2009. Will the real estate prices continue to decline there? By how much? Is this now a bad idea? When will it be safe to buy there?

#96 WesternGrit on 02.04.09 at 10:14 pm

Hi Garth,

I was at your Surrey meeting last night. I’ve been reading your blog(s) for years.

About 3 years ago I resided in Calgary (before moving to the Lower Mainland). I was a manager of a large department for a large communications provider. I had many young assistant managers who were looking to buy houses, and we routinely talked about the Calgary market. I gave them this advice (in 2005/2006): “Cash out” of Calgary NOW, if you’re not happy there. Why? I was sure the inflation of house prices wouldn’t last. I told them, “if you don’t like this city, or this company, make the move to somewhere where you will be happy. Sure you may buy a home, but make it a reasonable debt”.

I had one young manager who was married but supporting his wife. He asked for my advice. He liked Hamilton – his own family was out there, and he said that being closer to TO would allow his wife more opportunities in the arts. I told him that he could always count on a solid reference from me. He went to Hamilton, got a job which has him at a managerial level one step up from where I was (and I was taking in around $70K), and has since bought an older home near downtown, but also near work, near transit, and near family. He is happier than the proverbial “pig in poop” – even if he has a debt. His wife is acting, and they are doing great.

Another employee I counseled sold a home in Calgary in 2006 for $600,000, then paid cash for a home in rural Sask – outside Saskatoon. He also got a farm in the deal. He is living in “paid for” bliss, and has remained with the company. Another employee I talked to about “cashing out” of Calgary, also moved to Saskatoon, bought an entire apartment building for the price of his Calgary condo, and pays for his schooling while he is also the “live in” care-taker for the building. Happy too.

My story: My family had real estate investments and hotel property in Regina. I (having a post-grad IT education) moved to Calgary in 2000 – right at the IT bust – and bought a small starter home for $165,000, with help from my family (down-payment). My folks sold the home they had in Regina (in 2001 for roughly $180K – built originally for $130 – a modest gain). They built a much larger home in Calgary for $440K (triple garage, brick, 3 level walkout in ritzy neighborhood). I (luckily, it turns out), had some marital problems (divorce), and ended up selling my home for roughly $240 – another modest gain. After paying my debts, and my folks off, I chose to move back into the nest. Folks were fine, and I pay a very reasonable rent for what amounted to a full basement suite (sans kitchen). We actually built and sold 3 homes in Calgary, making a tidy profit on all 3.

At about the time I started talking to my staff about “cashing out” of Calgary, I had some opportunities in Greater Vancouver. Realizing we all always wanted to be in this cultural mecca, and close to the sea and nicer weather, my family and I all decided to move out to the coast together. The home that was built for $440K sold for roughly $800K. We had already (in 2005) bought a lot in Surrey (1/2 acre for roughly $400K).

We spent roughly $800K (the Calgary home money – so consider it a “wash”) to build a home fit for 2 families, with LOTS of yard and garden space. It is paid for. I run a small fast food restaurant which is 50% paid for, and have chosen (and been asked to) continue living at home. In my culture this is not uncommon (our culture is another reason we chose Surrey). I have 2 years left on a truck loan, but it’s not a lease, so I will own it at the end.

We’ve benefited from the housing “boom” in two cities, then cashed it out to be in the place we love. Surrey is a great city for us. We have many of our family here. We are involved in the local politics. We live next to a market garden farm that sells all kinds of organic produce, milk, and beef, chicken and pork. We don’t have to drive anywhere for food, if we don’t want to. We can walk a little further down the road and buy lamb and goat. A little further is a series of greenhouses, then a “honey farm”. Anything specific (kitchen herbs, etc.) we grow in our kitchen garden. We have fruit trees. We are “handy” and did our own landscaping and a lot of other stuff – building your own home does that for you.

We’re preparing for a future that we think won’t be too different from what you’re books and blog are laying out. Best to be prepared. We have room in our paid for home for my brother’s young family too, and we can live in a relatively large amount of space. We’re expanding the garden, and looking into your solar system. We are putting together a block watch with a neighbor who is an RCMP officer, and another a few doors down who is retired RCMP. We’re happy living here, so don’t really have anywhere else to go.

Just a note about Surrey. While it may remind you of many places in Malton, Brampton, etc., there is a key difference: Surrey has hundreds of “urban farms” inside city boundaries – even close to the downtown area. There ALR lands (agricultural land reserve) maintain a city with hundreds of local produce markets. We can buy everything local – including wine made a few blocks away. I can go fishing in one of the many rivers nearby. I can “crab” off the piers 10 mins drive away.

Surrey is also a city of “immigrants” who often have worked 3 menial jobs to buy their homes. Most of these folks insist on owning, even when they first get here. They own a 6000 square foot “home”, but MOST of those homes you saw in Surrey have 2 to 3 suites paying off the entire mortgage. So, they are really “apartment homes – triplexes and fourplexes”. So, the “future” you mention coming to single-family “suburban cities” like Brampton is slightly different for Surrey. The stuff you mentioned about large homes turning into “multi-family” homes in a “dead” economy is already the case in MOST of Surrey. I would say other Vancouver suburbs – like Maple Ridge, Abbottsford, Langley, etc., are more like Mississauga and Brampton.

I noticed a comment from one person (above) claiming he would be “safe” in White Rock, or South Surrey. The market will tank faster there – DUE TO the lesser amount of “multi-family” homes with basement suites. He also fails to talk about the other “high end” areas in Surrey – parts of Fleetwood/Tynehead (North of Cloverdale) where homes AVERAGE between $1.2MIL and $2.5MIL. Sure these prices are “on paper”, but he paints a bleak image of Surrey that just doesn’t hold. North Surrey (Whalley and Guildford) are more the “trouble areas” – similar to what a lot of other cities have (Vancouver with East Van, South Van, etc., etc.). The crime rate in Surrey is lower than Langley, Vancouver, and Abbotsford.

While I don’t pretend that the make-up of Surrey (farms and market gardens) will prevent any housing slump – it won’t – I do think this will help when things get “darkest”. A lot of multi-family “3-plexes and 4-plexes”, and a ready supply of food. Sure there are “Big Boxes”, but right in there – are the Mom and Pop produce markets, the ability to buy direct from the farmer around the corner, etc. – and that’s NOT something you can have in downtown Vancouver, or downtown Toronto.

#97 landlord on 02.04.09 at 10:18 pm

a lot of people don’t realize this isn’t a zero sum game. not very many people are going to be able to fully insulate themselves from this downturn. it’s ridiculous to think the tide has turned and now it’s time for the vultures to strike. in my experience the rich get richer and the poor stay poor. and the new reality is everyone gets poorer.

#98 Midas on 02.04.09 at 10:29 pm

# 45 / “I am actually one of a few that are waiting a year to purchase. Just recently have become consumer debt free and am saving like crazy for a downpayment. We are looking in the North Richmond Hill, ON area however prices are still really steep…”

Save your money, all those homes are coming down, down, down in price. by 2011 you’ll pick up those fancy 45 foot lot homes N. of Elgin Mills with hardwood floors and granite counters for 250K or less. And the sad part is by then you’ll be much wiser and will not want them debt traps even at those fire sale prices. Some how I know that the priorities of people are about to change forever, and purchasing a house will be very low on the priority list. Do the right thing – quit being a consumer!

#99 ESL on 02.04.09 at 11:15 pm


Steve, agree with your comments.

Pensions will be the next crisis and IMO, no later than end of this year. Expect many large pension funds, led by the civil servants, to come knocking on the taxpayer door. Really quite pathetic..


Jo would you like to know what is truly pathetic? You might be “pleased” to know that the Federal Government has already spent every penny of Public Servants’ pension plans. There is no money in the kitty, not a single penny, just worthless IOUs.

To add insult to injury they also stole our “surplus” of $30 Billion, then afterwards raised our contribution rates by 50% in the past 5 years ” to keep the plan solvent” (what a joke.)

Yet there’s not a penny in the till today. For years our pension contributions have been funnelled into General revenues and have been spent by the Feds on government programs for the masses.

Any other pension plan administrator in this country that tried to pull off this nonsense would be thrown in jail, yet the Feds can indiscriminantly pilfer our hard won savings with no consequences.

Tell me Jo how would you like it if the Feds stole your Pension and replaced it with IOUs, and someone wrote a snarky comment saying you’re the pathetic one for whining about the Feds who stole your money? If things take a turn for the worse, you might end up standing beside me angry at someone who implied we got what we deserved.

#100 dd on 02.04.09 at 11:29 pm

#80 Carole AB on 02.04.09 at 7:35 pm #52 DD & John

“Edmonton layoffs..don’t know stats but will this help?”

Sure would … more layoffs more house prices will go down.

“On the positive side word is drilling companies do not want a repeat of the 80’s (Nisku ghosttown) where all the good help left and were hard to find when things started up again”

Ya I have heard that before. If oil and gas prices stay low there will be layoffs. CEO’s are too short sighted.

#101 dd on 02.04.09 at 11:55 pm

#85 Maurice Troy

“So…house prices are GOING UP in Winnipeg AND Ottawa!! Some housing bust, huh, Garth? LOL!!”

Be smart and sell into the rising market. It won’t be rising for long when Winnipegers starting seeing the unemployment numbers rise.

#102 Gord In Vancouver on 02.05.09 at 12:23 am

Garth wasn’t exaggerating at last night’s presentation – here’s proof:

Vancouver Offices Emptying as Businesses Downsize

#103 Gord In Vancouver on 02.05.09 at 12:36 am

Another interesting day in Vancouver…………

Feb. 4, 2009

Developer sues buyers for backing out on condo pre-sales agreements

#104 Van-zee on 02.05.09 at 1:35 am

@ gord 100.

I walked along west second from Granville Island to Burrard last weekend and was struck by all the business for lease signs contrasted by the exotic car boutiques, very strange.

#105 Mike (authentic) on 02.05.09 at 3:44 am

Gord In Vancouver “Developer sues buyers for backing out on condo pre-sales agreements”

I figured this was going to come down the road at some point as speculators who purchased to flip (and profit to the next greater fool) woke up a realised they are in negative profit territory.

The developer should sue those who want to illegally break their contract, after all, the developer did build the building.

Real Estate is a risk investment (sorry if that wasn’t explained to you by your Realtor), it can go up or down.

I imagine we will see more stories like this as prices keep dropping.

I wonder if there are simular stories like this in the USA as their prices started falling 18 months before us?


#106 Mike (authentic) on 02.05.09 at 3:57 am

#85 Maurice Troy Lamont on 02.04.09 at 8:09 pm So…house prices are GOING UP in Winnipeg AND Ottawa!! Some housing bust, huh, Garth? LOL!!”

Well Maurice, me thinks you own a property in either of those 2 places and are pumping the market a little. ;)

If you look at Winnipeg, it was very cheap RE, but priced accordingly to employment in Winnipeg (Burns weiner factory, ie, not much good employment there), weather (Winterpeg) and location (middle of no-where).

Ottawa, well, we can see what homes were cheap there, it’s beside Quebec and covered with politicians.


#107 Anxiously Waiting the Housing decline on 02.05.09 at 9:46 am

#97… I don’t want a big home just something modest. We are currently living in Burlington (rental) and are making the move to Oak Ridges area to be closer to family. My son starts grade one in Sept 2010 so we wnat to be settled in that area…. as long as housing goes down so that it’s more affordable I will be happy…. most of those houses are still north of $425,000 +++ …. hopefully they will come down … I do not want to be a slave to my home. I don’t care whether it’s a town, semi or detached as long as it’s affordable!

#108 Future Expatriate on 02.05.09 at 10:40 am

#71 … sorry, it didn’t.

You’re talking about microcosm, while I’m talking about macrocosm.

You are essentially claiming that a worthless asset (the US Dollar) has worth solely because banks are hoarding it and thereby creating a shortage, and that they will continue to do so because if they fail to do so, it will become worthless.

You have essentially described a BUBBLE in the USD. One that will pop just like every other bubble.

I submit to you the game of “Hot Potato” and the inevitable outcome.

#109 Anxiously Waiting the Housing decline on 02.05.09 at 12:30 pm


We are not looking for anything huge, just a modest size whether it be a town, semi or detached… it just seems rediculous that townhouses are 375K ++…. we are looking in that Bond Lake , Oak Ridges area…. so hopefully by May/June 2010 we can snap up a deal!!

checkout these…

These are detached towns ~ Phase III start at $389,000 for 2100 sq ft. up to $468,000 for 2400 sq ft.


#110 Bottoms_Up on 02.05.09 at 6:47 pm

Hi Anxiously,
Prices in that area are going down. Keep waiting. Garth believes the summer could be the right time to buy.

#111 Bottoms_Up on 02.05.09 at 6:59 pm

Jelly, Albertans seeing that $234,000 ‘box’ in a shitty neighbourhood as cheap just proves that housing prices out there still have a LONG WAY TO GO (down).

#112 Winnipeg is No Different on 02.06.09 at 12:46 am

Re: #74

I saw that article in the print edition today with a new headline: “Winnipeg house sales down, but not price”. The Wpg Free Press should have slapped a “… yet” at the end of that headline as active listings are up 50% from last year. Volumes drop, inventory rises and then prices fall.

In fact, prices have already fallen from the peak. The average selling price for a residential detached home was $191,000 in January 2009, down from $224,000 in May 2008.

#113 Mr.Doom&Gloom on 02.06.09 at 7:14 am

dekethegeek: Nah – wasnt me. Same name I guess.

Nope, that was my first ever post on the site. Don’t have a PS3 and dont really want one. Just looking for a nice home… a cheap price of course