This also explains why would a sane Canadian buyer pay 100,000 over asking prices because  at least 95% Canadian buyer is not doing this. Realtor are fooling the foreign buyers to pay as much over asking price as possible. On the other hand realtors' explanation for increasing prices is Canadian economy is growing  and home buyers  are optimistic. Multiple visa, foreign investors,  high rise development, flipping are some of the pieces of the puzzle.