Speaking in Toronto, Bank of Nova Scotia chief executive officer Rick Waugh said even though there is a housing bubble in Canada, he doesn’t expect the residential real estate market to crash.
“What we see now is probably, at worst, a soft landing,” Mr. Waugh told reporters after a speech to the Toronto financial community.
“The economy is strong enough and diversified enough that the impact will be handled accordingly without the risks of a bubble – of an extreme bubble. There is a bubble.” …
“The numbers we are seeing now are really not a huge surprise,” Mr. Waugh said. “They are well within our expectations, let’s say 10 per cent in sales volume, and 10 per cent in prices.”
Of the slowdown in the market, he added: “This is happening. It is happening.”
– from ‘At worst, housing market headed for soft landing: Scotiabank CEO’, G&M, 18 Sep 2012
We haven’t been headlining each and every banker’s comment on the RE markets, but this one will suffice as fairly representative of what’s being said currently.
1. Note the pattern; played out in all RE collapses around the world. First, “There is no bubble”. Then “Sure, there’s a bubble, but the ‘landing’ will be soft”. (Later: “We warned this was a bubble and that price drops were likely.”)
2. One has to wonder whether these guys actually understand what a bubble is. If you admit one is present, the coming collapse is a given.
3. “Probably, at worst, a soft landing.” Really? Does he really believe those are the odds?