Dags - you are absolutely right.  
However  the 'explosion of demand' you mention comes from people seeing house prices rise and they want to get in on the action (demand feeds on itself) or FOMO (fear of missing out).  Also since its impossible to generate any income from savings in the bank some are buying properties to generate income.  At the root of most of the 'demand' is:  Low Rates (and yes there have been some foreign investors - a secondary effect).  BoC should have seen this problem coming a mile away and raised rates several years ago but lacked the courage to do so. They made a HUGE mistake. Now we will all pay.