If There Isn’t A Bubble, Why Are All These Public Figures Feeling Moved To Publicly Announce That There Isn’t A Bubble?

This post, originally published 2 Mar 2010, will now be used as a repository for similar statements from public figures, and updated on an ongoing basis. It is accessible from the ‘What Bubble?’ sidebar graphic. – vreaa

“People use the B-word, in terms of a housing bubble. Vancouver isn’t in one.” – Will McKitka, real estate agent, Macdonald Realty, Globe and Mail, 9 Mar 2013

“The bubble is non-existent. The sky is still there. … What remains clear for current and future homeowners in Metro Vancouver, is that the underlying fundamentals of the housing market remain strong.” – Anne McMullin, President and CEO, Urban Development Institute, homesanddesign.ca, 13 Feb 2013

“We don’t see a bubble in Vancouver.” – Brian Yu, Onni Group, CTV News, 29-30 Jan 2013

“There never was a housing bubble. So it hasn’t burst, because it never existed.” – James McKellar, academic director of the Real Property Program at York University’s Schulich School of Business, MoneySense, 16 Jan 2013

“There is no property bubble. Period. – Michael Levy, financial analyst, Global TV News, 8 Jan 2013

“You can’t burst a bubble that wasn’t there.” – Tsur Somerville, Director of the UBC Centre for Urban Economics, Sauder School of Business, The Province, 14 Sep 2012

“People come to town and say it is a bubble, but what do they know?” – Bob Rennie, Vancouver condo marketer, The Province, 24 Aug 2012

“The big question people ask is, is Canada’s housing market in a bubble. Our answer to that is no.” Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, Bloomberg, 8 May 2012

“The housing market is not in a bubble. … We remain quite comfortable. Frankly, I’d like to see the rhetoric come down a little bit.”Gordon Nixon, CEO of Royal Bank of Canada, Bloomberg, 8 May 2012

“In our view, the national housing market is more like a balloon than a bubble. While bubbles always burst, a balloon often deflates slowly in the absence of a pin.” – Sherry Cooper, BMO’s chief economist, and Sal Guatieri, senior economist, BMO report, 30 Jan 2012
[Frighteningly reminiscent of:
“Balloons don’t burst. You can put air in a balloon and it can expand or you can deflate a balloon, where air comes out… now air can come out of the balloon rather than the balloon popping.” – David Lereah, PBS, 29 Nov 2005
“It’s more like a balloon that inflates and deflates… The air is coming out of the balloon, but the bubble is not bursting.” – David Lereah, Lowell Sun, 21 Mar 2006]

“What bubble? If I never have to hear one word again this year, it would be “bubble.” One of the most compelling aspects of the bubble is there is no way to predict it.” – Leah Bach, Realtor, BC Business magazine, 6 Jan 2012

“The threat of a bubble has largely dissipated. But, really, there never was one.” – Robin Wiebe, Conference Board of Canada, speaking of Metro Vancouver [Vancouver Sun, 29 Nov 2011]

“Ward McAllister, president of Ledingham McAllister Properties, and fellow panelists Eugene Klein, president-elect of the Real Estate Board of Greater Vancouver, and real estate consultant Richard Wozny, of Site Economics Ltd. were at the board of trade to debate whether or not Vancouver real estate is in the midst of a bubble. They all agreed it is not. Moderator David Podmore, CEO of Concert Properties Ltd agreed. Podmore wore a button to the conference with the slash symbol for “no” imprinted over the word bubble.” – 21 Oct 2011

“We have not seen clear evidence of a bubble in the housing market in Canada.”Jim Flaherty, Canadian Finance Minister, news conference, NYC, 5 Oct 2011

“Well I guess the first question is, is there a real estate bubble at all? … We had a financial crisis, the largest we’ve seen since the Great Depression, we had an ensuing global recession, and if that isn’t a trigger or tipping point, for any kind of inflated market to see a major correction, I don’t know what is.”
– Cameron Muir, Economist, BC Real Estate Association, CTV 27 Sept 2011

“Vancouver real estate no bubble says economist”, cbc.ca quoting Brian Yu, economist, Central 1 Credit Union, 15 Sep 2011

“Canada’s market is not in the midst of a bubble”Sal Guatieri, senior economist at BMO Capital Markets, marketwatch.com, 29 Mar 2011

“While Vancouver prices are high by Canadian and North American standards, as evidenced by a recent photo essay on the most expensive streets in the world, they are still less than some European and Asian cities.” Michael Geller, francesbula.com, 21 Mar 2011

“An overpriced market isn’t the same thing as a bubble. Overpricing is a perfectly normal thing in any market.” Jay Bryan, Montreal Gazette, 30 Dec 2010

“I don’t see a price bubble and I don’t see that we need the mortgage criteria tightened as is suggested in some quarters”Helmut Pastrick, chief economist of Central 1 Credit Union, Financial Post, 19 Dec 2010

“I’ve prided myself in walking away from conversations involving the housing bubble, on the basis of me being fed up with telling people it doesn’t exist” – From ‘No Bubble, No Trouble‘, by Stephen Dupuis, president and CEO of the Building Industry and Land Development Association (BILD), Toronto Sun, 12th Dec 2010

“The evidence is not there that Canada has a housing bubble. In fact, the evidence with respect to affordability of mortgages in Canada is solid and we have a stable market”Finance Minister Jim Flaherty, to the House of Commons finance committee, 23 Nov 2010

“The Canadian housing market does not appear to be in a bubble.” – BMO Economists Earl Sweet and Sal Guatieri, report from BMO Capital Markets Economics, cited at pr-canada.net 18 Nov 2010

Fears of a Canadian housing bubble unfounded” – Jay Bryan, Reporter, Postmedia News published in Vancouver Sun 15 Nov 2010

There isn’t a bubble in Canada” – Don Campbell, Real Estate Investment Network, BNN.ca, 28 Oct 2010

[I] do not believe the city is in a bubble.” – Michael Goldberg, dean emeritus at the Sauder School of Business at the University of B.C., The Vancouver Sun, 20 Oct 2010

“They’re saying a “bubble” is about to burst. It makes me laugh…” – Pierre Marchildon, Marchildon Property Investment Partners, in a video commentary, ‘The Vancouver Real Estate “Bubble”, youtube 7 Sep 2010

“I found the use of the word ‘bubble’ a little odd right now. Bubbles aren’t just prices — they are turnover, volume and transaction. I don’t think anyone is out there lined up around the corner, sleeping three nights in a row to buy the first condo in Winnipeg. If you go back to 2008, that was the environment — that is ‘bubble-ish.’ That was Vancouver and Toronto as well.”Tsur Somerville, University of B.C. business professor, CTV News, 1 Sep 2010 [Um.. what we’re seeing at this point is a bubble that has peaked and is beginning to implode. We’re past the phase of manic run-up. The buyers are exhausted. -vreaa]

“There is no bubble; no crash will happen.”Don Campbell of REIN (the Real Estate Investment Network), as heard on CBC radio 31 Aug 2010 (quoted by pricedoutfornow at vancouvercondo.info 31 Aug 2010 1:03pm.)

“Just because homes are fully priced in many areas does not mean a bubble has formed.”Patricia Lovett-Reid, senior vice-president, TD Waterhouse, Financial Post, 26 Jun 2010

“Phew. With yesterday’s report that home resales are cooling and price increases shrinking, we can finally put behind us the horror of Canada’s great imaginary housing bubble. This mythical creature terrorized credulous analysts and journalists in recent months, only a short while after some of these same unhappy people had been shaken by the equally nonexistent Canadian housing-market collapse.”Jay Bryan, ‘Canada’s housing market settles down’, Montreal Gazette, 17 Jun 2010

“There is no evidence of a bubble.” Jim Flaherty, Canadian Finance Minister, Reuters, 12 May 2010

“A bubble in the national housing market is not in evidence.”Phillips, Hager & North, April 2010

“Anyone expecting a massive price decline like you are seeing in the US is going to be sorely disappointed.” … [Interviewer: “In your view, there is not a housing bubble at present?”] “No.” – Gregory Klump, Chief Economist with the Canadian Real Estate Association, CBC Radio, 19 Apr 2010

“I don’t believe there is a housing bubble in Vancouver.” – Rob Regan-Pollock, Vancouver mortgage broker, CBC Radio, 19 Apr 2010

“You know, we don’t hear people saying “It’s different this time”, that’s the classic manifestation of a bubble.” “We don’t have a housing bubble in Canada”Will Dunning, Chief Economist for the Canadian Association of Accredited Mortgage Professionals, G&M, 13 Apr 2010 [more here]

“We haven’t been able to find any evidence yet of housing prices being out of line with fundamentals in any of the markets in Canada.” – Bob Dugan, Chief Economist, CMHC, bnn.ca 12 Apr 2010 [more here]

“We do not have a bubble.” – Vancouver Realtor ‘silverman’, RE Talks 15 Apr 2010 9:36 am

[Regarding the risk of a ‘double-digit crash’] “It’s not going to go there.. I have no reason to believe it would drop anywhere near that.” – Larry Yatkowsky, Vancouver Realtor, CBC News, 7 Apr 2010 [more here]


Original Post:

“I would certainly not say we are looking at a housing bubble” – Paul Jenkins, senior deputy governor of the Bank of Canada, ‘Jenkins says no housing bubble’, Reuters, 22 Feb 2010

“I’m confident that we are not going into a bubble situation.” – Elton Ash, Re/Max’s executive vice-president for Western Canada, The Vancouver Sun, 24 Feb 2010

“Whether there’s a bubble or not you can only see after the fact” – David Dodge, former Bank of Canada governor;  ‘Dodge suggests Feds should cool house market’, The Globe and Mail, 14 Feb 2010

“I do not see evidence of a housing bubble” – Mark Carney, Governor of the Bank of Canada, Reuters, 16 Feb 2010

“Recent house price increases do not appear to be out of line with the underlying supply-demand fundamentals.” – David Wolf, an advisor at the Bank of Canada, 11 Jan 2010

“There is no clear evidence now of a housing bubble in Canada” – James Flaherty, Minister of Finance, The Globe and Mail, 6 Feb 2010

“There is no compelling evidence of a housing bubble, but we’re taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble”James Flaherty, Minister of Finance, Reuters, 16 Feb 2010

“While some analysts and commentators say there’s a house price bubble forming, it is not clear that this perspective is supported by the facts” – Canada Mortgage and Housing Corp., The Globe and Mail, 6 Feb 2010

“Everyone is confusing leftover pent-up demand from 2007 to 2009 and the current low interest rates as a possible bubble.” – Peter Kinch, of the Peter Kinch Mortgage Team, Vancouver; ‘Bubble. What Bubble?’, brokernews.ca 1 Feb 2010

“The market is reasonably healthy but certainly not frothy” – Stephen Dupuis, president, Building, Industry and Land Development Association, The Toronto Star, 24 Feb 2010


You’d think people would keep this in mind:

Bernanke: There’s No Housing Bubble to Go Bust, Washington Post, 27 Oct 2005


Addendum: ‘Those Who Get It’

Kudos to those who get it. Here’s David Rosenberg, 17 May 2010: “No Housing Bubble, Eh? (Okay — we’ll call it something else: a giant sud). Home prices have surged to record levels relative to incomes or rents so call it whatever you like.”

And this list of ‘Those Who Get It’ quotes care of Ben Rabidoux at financialinsights 30 Jan 2011:

Dean Baker“It looks me like you have some real problems…Canada could see house prices collapse by 25 to 30 per cent if interest rates rise by about two percentage points”

Robert Shiller– “The Canadian housing market could face a similar housing bust to the United States, particularly in more bubbly markets as Vancouver and Calgary”

Paul Krugman– “Canada cannot be complacent in the face of disturbingly bleak global conditions, because Canadians spend too much relative to their household incomes and the country’s housing bubble has yet to burst.”

David Rosenberg“…Housing values are anywhere between 15 per cent and 35 per cent above levels we would label as being consistent with the fundamentals. If being 15 per cent to 35 per cent overvalued isn’t a bubble, then it’s the next closest thing. We are talking about two to three standard deviation events here in terms of the parabolic move in Canadian home prices from their lows. So, if it walks like a duck …”

Mike Shedlock– “A Canadian housing crash is a given. The only thing that remains to be seen is how deep the crash is.”

Don Coxe– “Canada continues to experience a real estate bubble”

Stephen Jarislowsky– “In Canada the hardship still lies ahead. Our houses are still 20 to 30 per cent above normal levels…I think things are going to get a hell of a lot worse….I hope I’m wrong but I think Canada is on the edge of a lot of trouble.”

And even more ‘those who get it’:

“This is a city where we’ve built our economy, and many of us have built our personal lives, on speculating on real estate. Even our own houses, we pay crazy prices for them, in the expectation that prices are going to rise, not because our incomes can in any way cover them.”Frances Bula on CBC Radio, ‘The Early Edition’, 17 Feb 2011

Fitch, OECD – “People should think twice about continuing to leverage up in order to buy more house than maybe they really need” – 22 May 2012

10 responses to “If There Isn’t A Bubble, Why Are All These Public Figures Feeling Moved To Publicly Announce That There Isn’t A Bubble?

  1. While I neither agree nor disagree whether or not there is a bubble, the same can be said about why all the bears keep insisting there IS a bubble.

  2. Who is saying there is no bubble? The experts .

    Who says there is a bubble? The bloggers..average joes.

    Who has better credibility, the experts or the average joes? No wonder we haven’t crashed yet. =)

  3. A bubble is only visible in the rear view mirror once it pops. It is not visible to those inside it. However we have all of the classic earmarks outlined by all the economists.

    It has been proven again and again that most of the so-called experts are the most out of touch. Look at Allan Greenspan in the U.S. Furthermore the “experts” quoted above are hardly objective.

    One must ask themselves why so many observers who saw the U.S. market implode are so convinced there is a bubble in Canada. Read David Rosenberg at Gluskin Sheff or Mitch Shedlock at his blog.

    One thing is for sure. We won’t have to wait long to find out. We are now down to weeks from months before this market tips downwards. Then we see how far and fast it falls. This time next year (or sooner) we will know if we were in a bubble or not.

  4. Here are Hyman Minsky’s famous 7 stages of a bubble:

    Stage One – Disturbance:
    Every financial bubble begins with a disturbance. It could be the invention of a new technology, such as the Internet. It may be a shift in laws or economic policy. The creation of ERISA or unexpected reductions of interest rates are examples. No matter what the cause, the outlook changes for one sector of the economy.

    Stage Two – Expansion/Prices Start to Increase:
    Following the disturbance, prices in that sector start to rise. Initially, the increase is barely noticed. Usually, these higher prices reflect some underlying improvement in fundamentals. As the price increases gain momentum, more people start to notice.

    Stage Three – Euphoria/Easy Credit:
    Increasing prices do not, by themselves, create a bubble. Every financial bubble needs fuel; cheap and easy credit is, in most cases, that fuel. Without it, there can’t be speculation. Without it, the consequences of the disturbance die down and the sector returns to a normal state within the bounds of “historical” ratios or measurements. When a bubble starts, that sector is inundated by outsiders; people who normally would not be there. Without cheap and easy credit, the outsiders can’t participate.

    The rise in cheap and easy credit is often associated with financial innovation. Many times, a new way of financing is developed that does not reflect the risk involved. In 1929, stock prices were propelled into the stratosphere with the ability to trade via a margin account. Housing prices today skyrocketed as interest-only, variable rate, and reverse amortization mortgages emerged as a viable means for financing overpriced real estate purchases. The latest financing strategy is 40, or even 50 year mortgages.

    Stage Four – Over-trading/Prices Reach a Peak:
    As the effects of cheap and easy credit digs deeper, the market begins to accelerate. Overtrading lifts up volumes and spot shortages emerge. Prices start to zoom, and easy profits are made. This brings in more outsiders, and prices run out of control. This is the point that amateurs, the foolish, the greedy, and the desperate enter the market. Just as a fire is fed by more fuel, a financial bubble needs cheap and easy credit and more outsiders.

    Stage Five – Market Reversal/Insider Profit Taking:
    Some wise voices will stand up and say that the bubble can no longer continue. They argue that long run fundamentals, the ratios and measurements, defy sound economic practices. In the bubble, these arguments disappear within one over-riding fact – the price is still rising. The voices of the wise are ignored by the greedy who justify the now insane prices with the euphoric claim that the world has fundamentally changed and this new world means higher prices. Then along comes the cruelest lie of them all, “There will most likely be a ‘soft’ landing!”

    Stage Five is where the real estate industry is today in Canada. This stage can be cruel, as the very people who shouldn’t be buying are. They are the ones who will be hurt the most. The true professionals have found their ‘greater fool’ and are well on their way to the next ‘hot’ sector, like the transition from real estate to commodities now.Those who did not enter the market are caught in a dilemma. They know that they have missed the beginning of the bubble. They are bombarded daily with stories of easy riches and friends who are amassing great wealth. The strong will not enter at stage five and reconcile themselves to the missed opportunity. The ‘fool’ may even realize that prices can’t keep rising forever… however, they just can’t act on their knowledge. Everything appears safe as long as they quit at least one day before the bubble bursts. The weak provide the final fuel for the fire and eventually get burned late in stage six or seven.

    Stage Six – Financial Crisis/Panic:
    A bubble requires many people who believe in a bright future, and so long as the euphoria continues, the bubble is sustained. Just as the euphoria takes hold of the outsiders, the insiders remember what’s real. They lose their faith and begin to sneak out the exit. They understand their segment, and they recognize that it has all gone too far. The savvy are long gone, while those who understand the possible outcome begin to slowly cash out. Typically, the insiders try to sneak away unnoticed, and sometimes they get away without notice. Whether the outsiders see the insiders leave or not, insider profit taking signals the beginning of the end (remember who has sold their rental properties?).

    Stage seven – Revulsion/Lender of Last Resort:
    Sometimes, panic of the insiders infects the outsiders. Other times, it is the end of cheap and easy credit or some unanticipated piece of news. But whatever it is, euphoria is replaced with revulsion. The building is on fire and everyone starts to run for the door. Outsiders start to sell, but there are no buyers. Panic sets in, prices start to tumble downwards, credit dries up, and losses start to accumulate.

    We only have two stages left. If they arrive, then we will know.

  5. Back in the USSR one of the most popular newspapers (33.5 million copies) ran a Q&A on the back page, where they would field 3-5 questions “from the readers”. In early 1991 they chose a question “Will there be a money reform?” to explicitly answer “Of course no! No need to worry”.

    Well, what happens next week is a… money reform. You had _3 days_ to exchange a very limited amount of old cash for new cash. Everything above that limit was gone. Note that personal bank account were not as widely accepted as in the West – people had heaps of cash on hand.

  6. Nas Stillmatic

    Your forgetting why the powerful people are saying there is no bubble. It so the average joes keep buying and pushing the prices.

    When the bubble bursts, and prices come crashing, its the banks and corporations that will be buying up all the land. Just like they’re doing with the water and oil.

    Things that go up will always go down. Its part of the grand scheme since the Roman Empire.

  7. Vancouver Real Estate =DrugMoney

    A 10 billion dollar a year illegal drug trade has been driving the Vancouver real estate market for over 30 years, starting with the arrival of the Hells Angels in Vancouver. An rival that took place to exploit the Asian invasion real estate boom, which was more myth than fact, however that was soon to change. Drug Cartels saw a wonderful opportunity in British Colombia, a land rich in talented financial confidence men who had learned their trade pushing deals on the Vancouver Stock Exchange. Where penny stocks plays in mining companies would be used much the same way that real estate is used today, a vehicle to launder vast amounts of proceeds of crime into magical paper where tax could be avoided but assets could be gained. Much of the interest was coming from highly sophisticated organized crime financial planners working on behalf of Latin American crime syndicates, that where looking to expand out of the Caiman Islands and Miami, with an eye on developing opportunities in the Middle East, East Asia and Asia. Flush with money embezzled from governments, banks and the illegal drug trade, these Financiers found their brothers in arms in British Colombia’s business community, where dishonesty, deceit and corruption is the motto of the business leaders.

    Using immigration as a perfect cover story, and creating deals that would recruit unsuspecting business
    investors, British Colombia created a new kind of drug mule, one that did not carry drugs but instead laundered the suitcases of cash that these international drug cartels had made from their murders trade in illegal drugs, from your North American dumb ass kids. It was the perfect economic hit man strategy, for the cover story was true, immigration was taking place and people where buying homes, and a few did have strong economic holdings. But the vast majority of the real estate growth was due to international drug cartels money laundering activities in Vancouver real estate. This fact is born out when you look at the capital transfers between the different countries making up the largest portion of immigration. A gap of nearly 30 billion.

    Mysteriously, families and individuals from poverty conditions in third world nations where showing up in Canada with millions of dollars in capital assets. It was apparent from the number of application that there where far more millionaires in places like Vietnam, Somalia, India, Hong Kong, Brazil, Nicaragua and a whole host of other very beautiful countries, than their was in the entirety of Canada. But for soft headed Canadians this did not seem strange. And for those that did see the anomaly, the cartels propaganda machine went into action branding such doubting Tomas naysayers as racist or Neo-Nazi.

    The international drug cartels with the assistance of Canadian law firms went recruiting, for unsuspecting dreamers, with skills they needed that where required to look after the cartels interest. These organized crime syndicates where wise and knew that to co-opt honest people to do their dirty work they would have to be creative. As threats to life meant nothing to people that had grown up in the tough third world nations, have nothing, except for their dignity, they would die before giving that up. No what British Colombia’s illegal drug syndicates needed as leverage to coerce these moral law abiding, talented, managers was not a threat on their life, but a threat on their hope. And with immigration to a new land they had the perfect leverage. Like a fish out of water, once the newbie arrived, in a unfamiliar land, strange language and customs, Organized crime had them right where they wanted them, If you did not do as they wanted, you would lose everything, your home, your business, your children future.

    Not content to stop there, International organized crime has invested heavily into political parties and politicians, looking to turn public assets into their private property. With drug dealers involved in such on going scandals as the sale of BC rail, a public asset which has been mired in government cover ups, and the give away of British Colombia’s rivers and streams. It is little wonder that large honest international business like Holland America are choosing to steering clear of this haven for international drug cartels and their financiers. The recent pull out of major cruise lines from the British Colombia market has left a 138 million dollar hole in the tourist trade.

    Organized crime operates with impunity in British Colombia and unlike Mexico where President Calderon has warned that if they do not get organized crime under control the next president of Mexico will be a drug dealer. British Colombia has already past this point of no return, with Drug Cartels running real estate agencies, law firms, security services, construction companies, busing and trucking companies and of course taxi services. It is little surprise that politicians have become associates in the service of international drug cartels, looking after shutting down investigations, staying of charges, the issuing of special permits for immigration. 10 billion dollars a year, makes British Colombia the third largest illegal drug market in the America’s. A case study on how to turn a first world society into a third world slum. Much like big Chinese cities, looks nice on the surface but underneath just a slum, just a slum. Welcome to the Narco State of British Colombia and its Slum City of Vancouver, where you can look forward to your children going to school with illiterate third world drug lord kids. The largest driver of Vancouver real estate prices is international organized crime, looking for a safe harbor
    to access the US market. All the benefits of an American city but just out of reach of American law. Welcome to the third world.



  8. Pingback: “There was obviously an insularity to the Irish mentality during their bubble. I feel something of that insularity here in Vancouver.” | Vancouver Real Estate Anecdote Archive

  9. Pingback: Universities Agree: No Bubble – “There never was a housing bubble. So it hasn’t burst, because it never existed.” | Vancouver Real Estate Anecdote Archive

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