I hear a report daily about the market is set for a downturn, or that we are in a bubble. While most of the country is in a slower market, Toronto and Vancouver are not. In fact they are defying the odds and the price of Real Estate is steadily going up each month. It is on such an up swing that these two cities affect the whole countries stats. 

 
If you live outside of these cities you would think that what you hear on the news is a joke. You might also see your neighbourhood in such a slow market you can’t believe that houses are flying off the market at an alarming rate as your see on the news. 
 
There are so many factors that affect the price of Real Estate, such as, dollar exchange rate, Oil, unemployment, trade and more. Really there is only one thing that will affect the Market in Toronto and Vancouver: The Interest Rate. 
 
While interest rate will deter Canadian from buying, the rate still might not affect foreign buying. So the prices will go down, but it will not go down like you think, and it will not crash like you think. So much of our market is driven by foreign investment. It is the reason why our market in these two cities are so high. We as Canadians are competing for our real estate with foreigners. Typically it was Chinese investors, but now we also have American Investors coming north of the border. 
 
So While we hear that the market is going to crash, really if the interest rates go up, it will only be investors buying properties. The removal of Canadians in the market will lower the prices and bidding wars but the market will still be there due to foreign investment. 

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