Several points here: > Government: But they only make up 13% of the buyers. At what point does the additional percentage of buyers have a drastic impact on a

Several points here: > Government: But they only make up 13% of the buyers. At what point does the additional percentage of buyers have a drastic impact on a market? At the margins, buyers can exert large upward pressure on price. There was a great article in the NY Times a while ago about how Goldman figured this out in the IIRC Oil market and created havoc. Basically, each additional buyer has a potentially non-linear impact on price. > Ok, foreigners only make 13% of the buyers but they're a CATALYST. If you've bought a house you know price is often driven by comparable sales. When a foreign buyer bids e.g. 5% higher on a house, he's now driven up prices on comparable homes by at least 5%. When there are multiple buyers, it can play havoc with prices. That's one way price-insensitive buyers are a catalyst (relative to people whose incomes are tied to local fundamentals). > Um ok, so no one else is to blame? I'm not sure "blame" is the right word to use here. I'd say something like "there's no other cause". That said, Gordon has spent a lot of time analyzing both the Vancouver and Toronto markets. I have an interest in both markets as I live in Vancouver and am from Toronto, so if you have an alternate, data-backed explanation I'd love to hear it.