BMO says the housing market is in a balloon, not a bubble (apparently, there’s an important difference)

With confusion already rife about whether or not Canada’s housing market is in a bubble, Bank of Montreal economists have further muddied the debate with a competing (and equally vague) comparison. In a special report, they suggest the housing market is actually more like a balloon, explaining that “while bubbles always burst, a balloon often deflates slowly in the absence of a ‘pin’ ” (we gather a “pin” would be an event like a spike in interest rates, a severe recession or stalled foreign investment). Switching gears, they add that even Toronto’s hot condo market will likely “cool” rather than “correct.” As far as we can tell, that’s good news. Though we think the banking folks could probably stand to drop the metaphors. They’re confusing us. Read the entire story [Globe and Mail] »