There aren’t really any universal definitions of how a bubble in housing should look or how it can be quantified.
That said, my sense is that a housing bubble is a rise towards a peak that will be significant enough that if one were to look at time elapsed between the equivalent prices on either side of the peak, it will be around a decade. I call this the “flat price” period.
“Flat prices” for a decade, whether it is real estate or securities, is enough to seriously impair the financial reality of people who are significantly exposed to the bubble. For most, life has enough twists and turns over a decade that financial flexibility is necessary. Losing that flexibility because of exposure to an asset price roller-coaster is deeply impacting to the point that it will likely have a permanent effect on a person’s investment psyche.
So, according to my definition, the chart above shows that Vancouver saw a real-estate bubble from late 1988 to early 1990 as the period of “flat prices” extended for 12 years around the initial peak. There was a secondary peak, but this one did not have a “flat price” period that was as long. Also, retracing a recent bubble upwards again over a short period of time does not constitute a 2nd bubble in my opinion. It was bounce that was merely an aftershock of the 1988-1990 bubble.
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