There is no denying that the real estate market in Vancouver is red hot – prices have been rising with no end in sight.

But one market analyst thinks we will see the bubble burst.

Marc Cohodes used to run one of the largest hedge funds on Wall Street. Now, he’s eyeing the Canadian housing market.

“Short selling in stocks is basically, you borrow shares that other people own and you sell them,” said Cohodes. “If I was in the cattle business and I thought the price of cows were going to go down, I would sell all my cows, I would borrow some of your cows, I would sell them with the promise to buy them back and return them to you some day, and if they went down I would make, and if they went up and I got tired of my position, I would lose.”

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Speaking on Global BC News Morning, Cohodes made it clear that he has no personal stake in the Vancouver real estate market.

Cohodes said he wants to speak out about the housing market in Vancouver because he feels strongly “people are being taken advantage of.”

Recent headlines of real estate deals in Vancouver include a 7,200-square-foot heritage mansion for sale in Vancouver’s Shaughnessy neighbourhood for $21 million and a a $2.398-million price tag for a ‘fixer-upper’ in the Point Grey neighbourhood.

The Greater Vancouver real estate board says the benchmark price of a detached home in Vancouver hit $1.56 million in June, which is up 38.7 per cent in one year.

“I think it’s a money laundering-induced market,” said Cohodes. “Where the local politicians, or the BC Liberals, are kept or in cahoots with the real estate brokers, developers, lawyers, that angle. And they have sought Chinese money to keep the market propped up and it won’t last.”

“China has capital controls on and Vancouver has become the money laundering mecca of either the world or North America and something is going to change and change drastically.”

READ MORE: B.C. NDP calls for task force to fight tax fraud, money laundering in real estate

Tom Davidoff, an economist at UBC’s Sauder School of Business, said while he agrees with Cohodes that overseas capitalism is an important driver of our market, “whether there is anything illegal going on, and whether we should think of that as a bubble or a trend, I think are more challenging questions to answer.”

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Cohodes said if the provincial government doesn’t step in to change the market, they’re going to be voted out.

“This is sheer insanity,” he said. “What’s going on is you’re pricing local, hardworking people out of the market and as I’ve said before, the housing market in Vancouver resembles the Vancouver stock exchange and penny stocks many years ago and that didn’t end well at all.”

Davidoff said if something isn’t done, “Vancouver is going to become a playground for the rich.”

WATCH: Is there a real estate bubble?

7:19 Is there a real estate bubble? Is there a real estate bubble?

Finance Minister Mike de Jong has said he does not believe Vancouver is in a real estate bubble, to which Cohodes said “he’s full of more crap than a Christmas turkey.”

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“The market is ridiculously high and Christy Clark goes and takes real estate people over to China.”

READ MORE: Concerns raised over ‘Panda Bonds’ issued by B.C. government

“They have the records,” said Cohodes,” they just don’t want people to really know or they don’t want people to know the truth.”

In a statement to Global News, de Jong said:

We continue to work with both local governments and the federal government to address issues in Vancouver’s real estate sector, particularly to help bring new supply of homes to the market at affordable prices, and acting on concerns about regulation and enforcement. The premier announced last week that the province will end self-regulation of the real estate industry, and further steps aimed at helping make homes more affordable for the middle class will follow in the near future. Tweet This

Cohodes said he has solutions to fix what the “issues are” but B.C. politicians don’t want to “take the medicine because their livelihoods depend on this.”

According to Cohodes, people who buy in this market will only become “debt servants for the rest of their lives.” He said when Vancouver’s market does tank or collapse, people are going to lose a generation of savings and equity.

“It’s fueled by a money laundering bubble that politicians don’t want to end.”

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“At some point, bubbles burst.”

Michael Levy of Border Gold Corp. disagrees, saying while a bubble can be anything that is overvalued, we can just let the air out and it doesn’t have to burst.

“That would be a correction in the market that would take place, but as Mr. Cohodes said, I do not believe we are in the kind of bubble that is going to burst.”

“To say that markets are going to go down 50 to 80 per cent is absolutely irresponsible and I feel that his statements are doing nothing but inflaming the issues that are going on here, but not being helpful at all,” added Levy.

WATCH: Michael Levy reacts to Marc Cohodes’ comments:

5:31 Metro Vancouver housing bubble? Metro Vancouver housing bubble?

He said there needs to be more stringent regulation about who can buy in the market, what kind of financial stability they have and he agrees about adding a tax on foreign home ownership.

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Levy did agree the real estate market is a “cash cow for the provincial government because of the property transfer tax,” but he thinks the government is going to have to act soon to calm the public’s fears they are being priced out of the Vancouver market.

However, he does not necessarily think a tax is the best way to go.

“I think there are ways to go about this but I don’t think you have to slam the door and to start to think to put a huge tax in place, I just want to remind the viewers that in 1974 that’s what the provincial government did in Ontario,” said Levy. “They put a 50 per cent tax on properties that people bought for speculation and they tanked the real estate market.”

“It absolutely fell apart, so I say, be careful what you wish for.”