In a Scotiabank report on global property trends, Canada’s 8.3 per cent rise lags behind markets such as Ireland (13.3 per cent) or Sweden (10.1 per cent), but is well ahead of the U.S. (5.4 per cent) and the U.K. (5.6 per cent).
According to Scotiabank economist Adrienne Warren, though, it’s not foreign buyers who are driving up prices, but rather Canadians who are chasing after a limited supply, especially of single-family homes.
“The housing market in Canada has held up stronger than most of us expected over the past year, but then you have to keep in mind it's primarily because of the hot Vancouver and Toronto market that's driving up prices,” she told CBC News.
“People want to live closer to where the jobs are and they don't want to take on long commutes.”
Canadian housing demand has defied general weakness in the economy, in part because of low interest rates, she said, but the market is very uneven from city to city.
Weakening currency is not only making Canadian housing cheap, but also in Australia, said Warren.
“Foreign exchange considerations are taking on a bigger role, increasing the attractiveness of properties in countries whose currencies have weakened at the expense of relatively stronger currency markets in the U.S. and the U.K.”
Australia has seen an escalation of housing prices this year, especially in big urban markets such as Sydney and Melbourne.
Sydney now has the same affordability crisis that Vancouver is experiencing, with the median house price over $1 million Australian.
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A new report shows the year-over-year rise in the price of Canada’s housing in the second quarter of 2015 is one of the highest in the developed world and, while the low Canadian dollar is fueling foreign demand for Canadian real estate, that’s not what is driving up prices.