Mortgage pros say this is not a bubble…
There is no housing bubble, and any misguided attempts to fix one will cause bigger problems in the long run. That’s one of the main takeaways of a new report from Mortgage Professionals Canada, an industry group that represents 11,000 mortgage brokers across the country.
“Housing bubbles do not exist in Canada,” the group’s chief economist Will Dunning says in the report, adding that it would be “tragic” if any misguided attempts to fix a problem that doesn’t exist were to happen.
The report cites U.S. economist Joseph Stiglitz as saying a key requirement of bubbles is that the price of something is “high today only because investors believe that the selling price will be high tomorrow.”
In other words, a bubble occurs when people buy something solely because prices are rising quickly and they deduce that they will continue to do so.