Why isn't this drying up in Canada then?

I know basically nothing about the Canadian market, or the various factors (regulatory, tax-related, currency-driven, or otherwise) that might make it more or less attractive to foreign investment than the market in SF. I also know very little about which types of foreign buyers consider Canadian real estate attractive.

Since I'm admittedly pretty ignorant of that market, I honestly can't say.

The best I can tell you is that, while foreign demand in the aggregate might be global, there are many local factors that determine whether a particular market is or is not the recipient of significant investment at any given time. We can't assume a global/universal phenomenon applies itself evenly across all localities. Indeed, many of these locales might be substitutes for one another at different points in time and under various macroeconomic circumstances.

My hypothesis is that the China/hk dollar peg is to blame.

Edit: to clarify, the Chinese yuan and hkd are pegged to the USD. The recent strength of the USD has caused problems for China ...some people thing the peg will fail. If you are one of these people and you have lots of cash in China, you want to move the money out of the country and into a different asset class. The recent weakness of the Canadian dollar has made parking money in Canada very reasonable via buying of property. As a poor Canadian who owns no property, I'm pretty much outpriced of the real estate market in the city where I was raised .. with the exception of a condo ...those are being unconstru ted at an unbelievable pace. People I meet seem to own 2-3 condos a piece. Everyone thinks they'll just rent them out. I think we are almost guaranteed to have a condo collapse in the near future.

> People I meet seem to own 2-3 condos a piece. Everyone thinks they'll just rent them out. I think we are almost guaranteed to have a condo collapse in the near future.

If you're not hung up on owning, this is a great spot to be in. I can already rent a luxury condo here in Toronto for less than (mortgage interest + property tax + maintenance) would cost me if I had purchased it. Rich landlords are effectively subsidizing our rents (which are very, very cheap compared to SF or NYC).

My worry is that a day will come when rents start to increase. My great fear is that this will happen precisely when interest rates are high. What will we renters do then? We will truly have no choice then. The housing market in the UK is going through something like this now.

They're not going to raise interest rates in the teeth of a housing crash. You're going through exactly what I went through where I live, and I was able to pick up a house for half what it would have cost if I bought when I moved here.

The previous owner bought at the peak and still owed double what I paid. Don't be that guy.

Interest rates in the UK are 0.5% and have been for 7 years now. These low interest rates, while necessary for the real economy with inflation near zero, support extremely high house prices. Mortgage interest payments substitute for rent so low rates imply high prices.

As a renter without much in the way of assets a high inflation high interest rate regime is really beneficial. Higher rates would mean lower prices (thus lower required deposits) and high inflation would mean quickly building equity.

It's easier to become a naturalized Canadian for Chinese nationals, isn't it? Maybe the Chinese buying homes in the Canadian market are actually planning to move there and raise kids (as opposed to pure speculation in the US market).

Interesting thought - this NYT article suggests that many wealthy Chinese children are moving to and living in Vancouver.

http://www.nytimes.com/2016/04/13/world/americas/canada-vanc...

The University of BC has an alternate name: University of Beautiful Cars.

http://universityofbeautifulcars.tumblr.com

You probably don't need me to tell you who owns them...

University of Toronto Mississauga is the same, with respect to overly nice student vehicles.

Some of the difference in nominal price appreciation is currency driven -- the US dollar has been strong and the loonie has been (relatively) weak.

Loonie has gone up over 10% in the last couple months, Vancouver has continued to go crazier.

Because you can buy citizenship here (Canada).

Isn't Vancouver and Toronto also easing towards correction?

http://www.bloomberg.com/news/articles/2016-04-15/canadian-m...