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Originally Posted by Winsor_Pilates
Not to answer for him, but I think that's exactly what he's saying.
A bubble would look just like you're saying where prices would be going up, more people would be buying and lending would be going up at an enormous rate; all until some point where the bubble bursts.
All things not currently happening in Calgary.
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That is what I'm saying. The conditions were ripe for a bubble in 2007 (particularly) and we are now three years removed. Not saying that prices can't go down from here, but prices are certainly not sky-rocketing at this point.
Quote:
Originally Posted by AFireInside
Aren't all those things EXACTLY what happened in 2006 and 2007 in Calgary? By lowering the interest rate the government delayed the bursting of the bubble?
For the record I don't think we are going to see housing prices cut in half. We are due for a pretty significant correction in my opinion.
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The lowering of the interest rates should feed the bubble (and as a result delay the bursting). That didn't happen here though because the rest of the economy was also dropping and so what we've seen is more of a "deflation of the bubble" as opposed to a "popping of the bubble". (I'm using the word deflation here as in a balloon and not in its economic sense).
Its also important to recognize that a correction in prices doesn't equal a bubble bursting either. Corrections are part of the natural economic cycle and shouldn't induce panic and hysteria...which is what takes place in the sector where the bubble bursts.