Universities Agree: No Bubble – “There never was a housing bubble. So it hasn’t burst, because it never existed.”

“There are articles saying we’re going to have the same kind of crash we had in the United States, but that’s not going to happen,” says Jane Londerville, a real estate and housing adviser at the University of Guelph.
James McKellar, academic director of the Real Property Program at York University’s Schulich School of Business, is even more blunt. “First of all, there never was a housing bubble. So it hasn’t burst, because it never existed.”

– from ‘No bubble, no trouble’, David Hodges, MoneySense, 16 Jan 2013

Reminiscent of:
“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

For a collection of related quotes from various market participants, see:
‘What Bubble?’

21 responses to “Universities Agree: No Bubble – “There never was a housing bubble. So it hasn’t burst, because it never existed.”

  1. Many other so called educated types in the 80’s and 90’s also made delusional statements of the same nature. We always need a few more to laugh at over the next couple of years of price destruction.

  2. A quick google search reveals that Tsur Somerville owns a house on the westside of Vancouver. Biased much?

  3. Part of this is knee-jerk anti-americanism. The uncomfortable implication from those who are calling Canada’s market a bubble is that we are comparable to the U.S., and it is simply not conceivable to these academic elitists that Canadians could be as greedy and reckless as Americans. Hence, no bubble here.

  4. Realtor behavior

    Many long time elderly fellow immigrants told me, house price changes of Canada always lags behind the States. Let’s see if they are right!

  5. Well, no one understands what’s happening in the real world better than a career university academic!


  6. There is a globe and mail editorial on how the media is now talking ourselves into a crash, when fundamentals are so strong. Hilarious read

    • Just like the Business Week columnist a few months ago, who wished that the housing bears would just “shut up” instead of talking down his most valuable asset.

      If the market can be talked down, then the fundamentals aren’t strong. A market with strong fundamentals will keep trending stronger regardless of talk. Clearly this is lost on some people.

  7. When I was a kid, I tried to get out of trouble for a particular school incident. I had a great reason to escape punishment. I didn’t kick the other kid; I pushed him with my foot.

  8. I am always struck by how little data these academics use to support their vapid assertions. In fact, they don’t use any – they just make unsupported, sound-bite statements.

    Maybe they don’t cite data because they can’t find any to support their position? Or maybe they are just such publicity whores they just don’t care?

    Whatever the reason they give proper economists a bad name.

    • Don’t be fooled, Bally. They are not fools. They know exactly what they are doing and the message is carefully scripted before it leaves the confines of the corner office. Lets be clear that they are in the business of appeasing shareholders and not the general public. This is about money and getting the largest share possible not babysitting the poor saps who so willingly fall into the debt trap.

  9. The greatest trick the Devil ever pulled was convincing the world he didn’t exist.

  10. I expected Londerville would have been more nuanced than that; the US housing crash was not predicated on “subprime” per se, in actuality the vast majority of loans made were prime. Being an expert in CMHC goings-on I would have thought she would have known to look a bit deeper.

    Not to say that Canada is going to have a “US-style” crash but to state it’s not is…bold.

  11. “James McKellar, academic director of the Real Property Program at York University’s Schulich School of Business, is even more blunt. “First of all, there never was a housing bubble. So it hasn’t burst, because it never existed.””


  12. I’m fairly surprised that the prominent University commentators don’t at the very least express more complex analysis: surely they should allow that there is the possibility that what we see represents a speculative mania? Even if they rank that possibility as low, wouldn’t we expect them to acknowledge that possibility, and say why they see it as unlikely?
    Wouldn’t we expect them at the very least to acknowledge the bear arguments (price vs income; price vs rental yield; price vs GDP; price increases far greater than inflation; etc) and make their counterarguments?
    Isn’t that the way of science?
    The fact that they rule out the possibility of a bubble so strongly, and in such an out of hand fashion, seems very narrow.

    • You have hit on something important there. We are not even getting an acknowledgement of the probabilities from these scholars. You might just wonder about the value of their educations if it was not so obvious they were pushing an agenda.

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