I am not disputing the fact that especially Vancouver through the 1997 Hong Kong pass over and beyond has been an attractive place for Asian families.  I am simply saying that in terms of affordability we are at the 1989 level in Toronto today.  house prices have increased a great deal, but interest rates make about the same level of affordability, and in fact a little cheaper.

And so yes, it is cyclic, prone to booms and busts, but the secular trend is up based on more demand. As an aside, where I live in Toronto (my sister lives in Vancouver) the majority of the buyers are speculators.  either sitting on houses, knocking them down and building bigger ones or gutting them for resale. Or put another way, the marginal buyer in 416 is not the same as the marginal buyer in 604.