Coincidence or Causation?

The latest RBC Housing Trends and Affordability report was released a few days ago. In it, they added a new graphic showing bungalow affordability for Vancouver, Toronto and Canada excluding Toronto and Vancouver.

As most of us know, foreign buyers have been most active in Vancouver and Toronto. As far as I can tell, there is very little foreign buying going on in other Canadian cities. Here is that graphic with a few notations added.

Canada Affordability

For the last few decades, Canadian housing markets have mostly moved in tandem. But over the last several years, there has been a clear break between the two markets where foreign buyers have been active and the rest of the country. Is it just a coincidence, or is foreign buying now driving the Vancouver and Toronto markets?

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