Well, it’s official.

For the first time in reorded history, the three principal real estate markets in the country – Toronto, Calgary and Vancouver – have all been hit with a collapse in sales of 50% at the same time. The news this week is the most dramatic evidence possible that consumer confidence has been beaten to a pulp and left to die in an alley.

The declines from the first few weeks in 2008 is dramatic, and telling. The downward momentum so evident in the final months last last year is actually picking up steam and spreading nationally. It makes a mockery of the “buy now” cries of local real estate board officials. It suggests the stimulus measures in the recent federal budget may be woefully unable to stimulate anything. It’s graphic proof of the obvious – when people are worried about their jobs, they don’t buy houses. And, finally, this is the legacy forecast here months ago of the abrupt end of the Canadian 0/40 subprimes.

And, sadly, just the start.


#1 David on 02.05.09 at 8:27 pm

It reminds me of an advertisement I saw at the movies on the weekend.

I don’t recall it verbatim but it was from Remax.
The first line was something like “stocks are down 50%”.
The next line, having to do with home prices/value, was alluding to the “fact” that wasn’t/won”t drop like that.

I knew better than to believe that one.

#2 ThumbsUp on 02.05.09 at 8:29 pm

To add to the end of 0/40, the last ‘P-x’ rate mortgage was approved 120+ days ago, starting this month, all transactions are P+x

#3 squidly77 on 02.05.09 at 8:38 pm

how did they get a 120 day hold ?
i thought the 0/40 ran out on jan 12/09 (90 days from oct 15 08)

#4 squidly77 on 02.05.09 at 8:43 pm

so i guess feb 12 09 will be the absoloute end then
if you have a link would you mind posting it..thanks

#5 kitchener1 on 02.05.09 at 8:47 pm

Man, these 30-40-50% declines are downright dangerous, if we keep seeing declines of 50 or dare I say 60% (its coming only a matter of time) plus the market in the GTA is going to hit 1996 numbers in one year.

How many months of inventory are we going to be at by May or June?

Turning into a classic negative feedback loop.

With the way job losses are going we are 6-8 months MAX away from a “desperate selling situation” and when that starts prices will drop like a rock.

Look for 40% price drops for SFH in the GTA burbs and condos buy December 09

#6 squidly77 on 02.05.09 at 8:48 pm

its ok i found one..

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The Government will work closely with all stakeholders to ensure timely and effective implementation of these measures.

#7 guava.ca on 02.05.09 at 8:56 pm

Garth, thanks for the kind words about the site and congratulations on the successful tour.

January 2009 GTA housing indicators are charted at http://guava.ca/indicators.html

#8 Jon on 02.05.09 at 8:59 pm

US auto sales lowest January sales since 1963 – yet the number of full-time drivers has almost doubled. Chrysler down 55%, GM 49% and Ford 40%.

The company I work for, which is strictly Ontario based, had a profit margin of about 20% in 2008 (about 110 million profit). January was the first monthly loss we have ever experienced in our forty years of operations. Revenue down by 35% YOY.

December US new home sales, the largest engine of economic growth, was lowest since records began. This despite the US population increasing 59% since records were started in 1963.

In the Euro community problems are even worse. Spain, Greece and Italy are falling victim to a clash between a central monetary policy and independant fiscal policy. The debts of these nations are soaring to unbearable levels. However, unlike the US, they cannot simply print cash to get out of this mess. The Euro has a common ‘inflation’ fighting policy. Bankruptcy of these nations is becoming a very likely possibility and a EU bailout may be necessary to protect the federation.

Asia has it the worst. China’s GDP which expanded by 13% in 2007, scarcely grew at all in the last quarter and is now theorized to be shrinking. In the same quarter Japan’s GDP is estimated to have fallen at an annualised rate of 10%, Singapore’s at 17% and South Korea at 21%. Industrial production has fallen even more, and in places like Taiwan, have fallen 32% for the year ending in December. Japan’s exports fell 35% YOY in the month of December.

Is this bottom? Annualized, this type of drop in the economy would result in 20% reduction in GDP at least, far superior to the depression. However in 1982 certain months were as bad as January’s in North America. But in 1982 the pain was not felt worldwide – at least not as dramatically. On the positive side we have falling inventory levels, falling prices and demand is becoming slightly pent-up. However on the horizon we have further negative effects of pending job cuts, increasing unemployment, wage decreases, and falling house prices, all which lag the economy, it may be an indication that the ball game has barely started.

#9 a renter on 02.05.09 at 9:02 pm

I picked up two things from the Toronto Jan data..

1. Average price in GTA in January is roughly back to where it was in 2005

2. For Toronto proper, it seems the market peaked in April 2008 at $447,000. In January 2009 it has dropped back to 366,400 which is an 18% drop.


#10 Jon on 02.05.09 at 9:02 pm


and in Dubaii home prices have fallen 50% for condos and 40% for detached homes in the last four months! Sales levels according to one sales rep was “non existent”.

While although not publicly acknowledged, Narkheel apparently bailed out the city of Dubaii and its largest construction company. Both were bankrupt.

#11 Chris in England on 02.05.09 at 9:21 pm

House prices rise 1.9% in January …


but of course the downward trend continues. Quite weird, but hopefully anyone who reads this article with one eye on my house, will rush to buy it now prices are heading up!!

#12 Boombust on 02.05.09 at 9:22 pm

I have been outwaiting and OUTWITTING the RE shysters for some time now. I always knew I was right.

#13 John on 02.05.09 at 9:32 pm

“…the three principal real estate markets in the country – Toronto, Calgary and Vancouver”

“Greater Calgary is the FOURTH largest census metropolitan area in the country.” – Wikipedia

#14 average guy on 02.05.09 at 9:50 pm

Sales in Kitchener-Waterloo for Jan/09 down 27.9% over Jan/08. Relative strength?

#15 UBC Frank on 02.05.09 at 9:52 pm

But the real estate spokespeople will keep telling us that this is a GREAT time to buy.

Garth, here’s an old joke updated for 2009.
What’s the difference between a dead skunk on the road and a dead real estate agent on the road?

There are skid marks in front of the skunk.

#16 nonplused on 02.05.09 at 10:25 pm

How did Calgary make the “three principle real estate markets” list? Montreal is bigger! Maybe if you combine Calgary and Edmonton or consider Alberta as a whole, but Calgary is only a little over a million people. We just put all our tall buildings in an 8 block radius to look impressive and complicate transportation and parking.

People just like to pick on Calgarians because we never saw a bubble that we didn’t like! I remember a bumper sticker in the 80’s: “Please Lord let there be another oil boom, I promise not to piss it all away next time!” Well guess what….

#17 BC Guy on 02.05.09 at 10:34 pm

While 0/40 mortgages were ill advised, I don’t think that they played as much as a role as people think.

Sloppy underwriting, soft doc approvals played a bigger role.

I think our subprime was the high level of speculation especially in the Vancouver market. This utube link shows a broker acknowledging that 1/2 his business was offshore buyers, let alone the condo assignments, etc.
Regards to all

#18 kc on 02.05.09 at 10:34 pm

The line graphs for the last few months are going to look like airplanes on a ground crashing projectory… bombs away

#19 dd on 02.05.09 at 10:56 pm

” It suggests the stimulus measures in the recent federal budget may be woefully unable to stimulate anything. ”

Nothing replaces a heathly economy like a heathly economy.

#20 lotusland on 02.05.09 at 11:03 pm

intersting stuff on the National tonight. People in Vancouver trying to walk away from condo’s nearing completion. They don’t understand why the developer doesn’t want to accept any of the loss that was created by putting a downpayment on a $500k place, and not selling their existing place for 18 months……..hmmmmm………does that mean you would have given the developer some of the money if it went up???

funny how some people think………

I wish them all well, but not only will we see more of this, we will see developers going t*ts up from this in droves as well.

Garth is right, it is just the beginning

#21 Eduardo on 02.05.09 at 11:12 pm

Steady Ed Stelmach says there will be a stimulus plan to promote drilling new wells for juniors and mid-sized companies.

Soon he’s going to unleash some of the Heritage Fund for spending?

#22 Philosopher on 02.05.09 at 11:18 pm

I read your blog everyday … I just love it. I’m gleefully waiting for the coming recession … it sounds mean-spirited on the surface, but actually, we in the western hemisphere, obsessed with our obscene shopping malls and real estate ownership mania, need a serious kick in the rear end, so we can finally begin to ask ourselves what our lives are really going to be about? I’m tired of living in this consumer culture where we worry about home renovations more than the homeless, and the size of our bonus more than the plight of the unemployed … I say, bring on The Great Depression … it will teach us how to be human again … yes, there will be pain, but who said life wasn’t about painful lessons and learning from them?

#23 kc on 02.05.09 at 11:23 pm

small blurb from Mcleans, – As I was saying a couple pages back. Boosting “fiscal stimulus” with out watching WHERE the cuts are going to be coming from is or LACK of cuttings is hopeless. These countries are actualy making drastic cuts. I don’t care how much money governments throw at this problem, It is NOT going to help matters. All it is going to do is get the Fat Cats richer who are feeding off the pork barrel.

We say stimulus, they say cutbacks

For many finance ministers around the world, a budget just isn’t a budget these days if it doesn’t contain some all-important “fiscal stimulus.” But not everyone is hip to the trend: Ireland and Poland, for example, are cutting costs in response the economic crisis rather than ramping them up. On Tuesday, Ireland announced it was slashing over $3 billion in government spending from its budget and Poland said it would shave nearly $7 billion from its budget. Both governments have cited the need to support their credit ratings as a reason for the cuts, especially given that the U.S. and other Western countries have begun flooding the market with sovereign debt.

REPEAT – especially given that the U.S. and other Western countries have begun flooding the market with sovereign debt.


#24 Jake on 02.05.09 at 11:37 pm

Hey all,
I am a little confused right now. I purchased in ’04 and road the bubble up here in Edmonton. As a result of getting in at the right time, I owe relatively little on a nice little place in the South West. There is a part of me that wants to try to sell and rent until this settles. I can easily see prices dropping by another 100K and I would then be able to just buy a similar house straight up. The other part of me is saying “stop being so greedy and be happy you are not in negative equity already.” I think those of us who made a lot of easy equity over the last few years need to accept the fact that we did very little for it and not get so depressed when it disappears at the rate of 5-10K/month. Easy come, easy go. For those who took that equity and lived the high life, good luck.

#25 nonplused on 02.05.09 at 11:47 pm


When are you coming to Calgary?

#26 JET on 02.06.09 at 12:20 am

Wonder if we will see more of these to come:




#27 Golden Duck on 02.06.09 at 12:57 am

Based on my calculations, average price in GTA will drop to $255,139, this is 2001-2002 levels, from peak of APR 2008 $398,687 – a stunning minus 36% price drop.
Be smart cookies ladies, and ALWAYS ask Previous Sale Price and Year, and OFFER 2001-2002 price, even if they scream (unless you like to scream too in a few years).

Make no mistake and FIRE your agent if it breaks his/her duty of obedience/serving your best interests as a mighly Client. No hesitations, they need to learn to serve the new king around (The BUYER) or perish.


#28 kc on 02.06.09 at 1:03 am

Everyone who does or doesn’t have their heads in the sand to what Canada is heading for should read this!!

The fall of the “middle class” is going to be extremely painful. This is an artical from today’s Macleans magizine and I recomend you read it.

The vanishing middle ground
Many of the jobs that are disappearing today won’t come back

“Economists have been anxiously watching the middle class lose ground for years, and now its members are in free fall. As the Canadian economy unravels, jobs like Bragnalo’s are being lost by the thousands every month. More than 70,600 jobs vanished in November, and 34,400 followed in December—the majority of them the kind of solid manufacturing and resource sector jobs that were once the backbone of the Canadian economy. And there are many more losses to go. Tens of thousands of Canadians are now left wondering: where did the simple life go? And is the middle-class dream dead?”

full article:


#29 Happy Renter in North Van on 02.06.09 at 1:21 am

Garth, Garth… The real estate carnival barkers don’t like it when you tell the crowd the bearded lady isn’t worth looking at for their two bits… I’m surprised the “barkers” didn’t come after you with pitch forks while you were visiting the BC Lower Mainland!

#30 Bailing in B.C. on 02.06.09 at 2:42 am

Hey Garth, just got back to Squamish from your Vancouver talk. Great stuff! It was nice to meet you. As far as myself you were preaching to the converted but my friend was talking about selling all the way home.

#31 Mike (authentic) on 02.06.09 at 3:46 am

People are saving now and deleveraging themselves. They are not buying cars, TVs or houses but are putting their cash where it will do the most good (agaist debt). It’s not the government that will save the people (have they ever?) it’s the people who will do it themselves. Bailing out the banks won’t force them to lend. People don’t want to borrow, they want to save and deleverage. The sooner the gov’t realises the banks gave out too much free money and got us into this mess the sooner we can start on real solutions.

nonplused : How did Calgary make the “three principle real estate markets” list? Montreal is bigger! ”

We made #3 because we “are different” than Montreal.

kc said ” Ireland and Poland, for example, are cutting costs in response the economic crisis rather than ramping them up. ”

Ah, that’s the way to do it. Plus their children won’t have to pay for a boat load of debt in the future. They will also have fiscal ability to reimplement those cut programs in the future too as those countries won’t be drowning in debt.


#32 CalgaryRocks on 02.06.09 at 7:31 am

#22 Philosopher
… I say, bring on The Great Depression … it will teach us how to be human again … yes, there will be pain, but who said life wasn’t about painful lessons and learning from them?

History says that when things go really, really bad humans turn into animals.

#33 Jonathan on 02.06.09 at 8:34 am

John on 02.05.09 at 9:32 pm
“…the three principal real estate markets in the country – Toronto, Calgary and Vancouver”
“Greater Calgary is the FOURTH largest census metropolitan area in the country.” – Wikipedia

OK THAT IS DEFINITELY INACCURATE. Toronto is the largest, and the GTA is more than likely the second largest (since they are about the same size). Montreal and Vancouver are third and fourth, and I wouldn’t doubt their Greater areas outsell Calgary.

One reason Wiki is so flawed. You can write what you want. Someone should go on there and update that.

#34 Dan Mac Donald on 02.06.09 at 9:09 am

Bad news,for these people I hope Angus can help them ! http://www.cawlocal.ca/1256/newsdetails.asp?NewsID={D446EC86-A069-49BB-AEE7-2A68B453630C}#

#35 Jordan on 02.06.09 at 10:37 am

I don’t think Calgary is any larger than the greater Ottawa area, and Ottawa is usually considered to be the fourth-largest city in Canada, after Toronto, Montreal and Vancouver. How did it muscle into the top three?

#36 kc on 02.06.09 at 11:19 am

32 CalgaryRocks : #22 Philosopher
… I say, bring on The Great Depression … it will teach us how to be human again … yes, there will be pain, but who said life wasn’t about painful lessons and learning from them?

History says that when things go really, really bad humans turn into animals.


yes they may just do that…. here is the article I was making comments to a few pages back of how Harper had his papers signed in Texas…. this was printed last year :


Canada, U.S. militaries sign cross-border pact

David Pugliese, Canwest News Service
Published: Saturday, February 23 2008
Canada and the U.S. have signed an agreement that paves the way for the militaries from either nation to send troops across each other’s borders during an emergency, but some are questioning why the Harper government has kept silent on the deal.

Neither the Canadian government nor the Canadian Forces announced the new agreement, which was signed Feb. 14 in Texas.

The U.S. military’s Northern Command, however, publicized the agreement with a statement outlining how its top officer, Gen. Gene Renuart, and Canadian Lt.-Gen. Marc Dumais, head of Canada Command, signed the plan, which allows the military from one nation to support the armed forces of the other nation during a civil emergency.

The new agreement has been greeted with suspicion by the left wing in Canada and the right wing in the U.S.

The left-wing Council of Canadians, which is campaigning against what it calls the increasing integration of the U.S. and Canadian militaries, is raising concerns about the deal.

“It’s kind of a trend when it comes to issues of Canada-U.S. relations and contentious issues like military integration. We see that this government is reluctant to disclose information to Canadians that is readily available on American and Mexican websites,” said Stuart Trew, a researcher with the Council of Canadians.

“Are we going to see [U.S.] troops on our soil for minor potential threats to a pipeline or a road?” he asked.

Trew also noted the U.S. military does not allow its soldiers to operate under foreign command so there are questions about who controls American forces if they are requested for service in Canada.

But Canada Command spokesman Commander David Scanlon said it will be up to civilian authorities in both countries to decide whether military assistance is requested or used.

REPEAT : which allows the military from one nation to support the armed forces of the other nation during a civil emergency.

#37 linda on 02.06.09 at 11:38 am

Hey Marc! I’ve been doing some reading on alternate types of shelter structures and i’m interested in your opinion. If you have time, could you check out The Luna Project at http://www.lunaticadventures.ca and let me know what you think? One thing that caught my eye is this project is being run by a former Bay St. worker. He’s got his priorities straight! It’s about livin’ in the round! Cheers!

#38 jess on 02.06.09 at 2:20 pm

i remember the time when some Ontario politicians said it was cheaper to keep people in their homes rather than putting them on welfare since their mortgages were lower per month. But, the Ontario government opposed that idea. So when employment ran out next you had to sell off your pension funds before you could get welfare. Work for welfare was the slogan at the time.

It makes me wonder why Mr. Harper changed the bankruptcy rule regarding pension funds? Did history help guide this economist?

In 1994, approximately 10.7% of the population collected social assistance (Schafer et al., 2001).
Welfare dependency became a particular problem in Ontario, one of Canada’s most prosperous provinces, where the number of welfare beneficiaries in the province rose from 5.2% in 1985 to a record 12.7% in 1994—the highest rate among Canadian provinces. Not surprisingly, Ontario welfare spending experienced a real increase of 232% over this period, reaching a high of $7.94 billion [1] by 1994 (Sabatini, 1996; MF, 1995).


The promise to make welfare recipients work for the social assistance benefits was a wildly popular issue during the recent Ontario election. Polls showed support for workfare, as it is commonly referred to, as high as 87 per cent.6 Support crossed all income levels and demographic segments of the population, including some recipients themselves who wanted the opportunity to work and hoped that workfare would give them a better shot at finding a job. Yet, despite its popularity in principle, workfare in practice has been shown to be fraught with problems, including difficulties in placing recipients in jobs, limited cost effectiveness and labour displacement. If excess employment existed, moving individuals from social assistance to the labour market would not be a difficult task. However, in an economy of high unemployment and less stable jobs, the idea of workfare is not so easily implemented. The Province of Alberta had some success in moving individuals from the welfare rolls to the workplace, but not without a jump in oil prices, which gave rise to substantial job growth. In Quebec and New Brunswick, on the other hand, attempts to do the same have failed because jobs could not be found for welfare recipients. Similar problems have been experienced in some U.S. states, where program success or failure has been attributed to the availability of jobs rather than to the effectiveness of the program itself.7

#39 dd on 02.06.09 at 2:37 pm

#22 Philosopher

“I’m gleefully waiting for the coming recession”

Gleefully. Wow. Yes bring on the starvation, no hope, and washed up dreams. I just love misery.

#40 ralph on 02.07.09 at 1:39 am

To all you speculators out there who where trying to make a fast buck in real estate……what goes around comes around.

Many decent people especially young families starting out where shut out of the market. Or in desperation bought and got in over there heads. They are the ones I feel sorry for.

#41 Emma on 02.07.09 at 12:40 pm


In a sick way, I kind of understand where you’re coming from. I’ve had this same conversation with some of my friends. Consumerism and materialism are bred by greed and lack of perspective. The Gen X (of which I am a part) and Gen Y’s have no clue what it means to want for something. This could just be the serious kick in the *ss we all need to refocus our lives. I’ve come to the point where I’ve asked myself, “what will happen if I lose my home?” I’ve decided that it will suck. Huge. But if I still have my health, my friends, my family, I will be able to live through it all. This is the time for us to contemplate what is truly important in our lives. It ain’t money.

#42 fasblog on 02.08.09 at 1:33 pm

That is a huge amount. I wonder what else is in store for the future. Its high time the government tries to do something to improve the economic conditions.