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A sold home is pictured in Vancouver, B.C., Thursday, Feb. 11, 2016. Prospective buyers and neighbours have long complained that investors are buying houses and leaving them empty, driving up prices and reducing supply, but there's been little data to back up the claims.

JONATHAN HAYWARD/The Canadian Press

The Bank of Canada is warning that foreign ownership is contributing to Toronto and Vancouver's unsustainable rise in housing prices, but a dearth of data makes its overall impact difficult to measure.

The typical factors that drive housing markets – such as job growth and immigration – don't explain the current frenzy in these two cities, Bank of Canada Governor Stephen Poloz said Thursday, as he cautioned prospective home buyers and their lenders not to expect this trend to continue.

The central bank's semi-annual report assessing the risks facing Canada's financial system stated that foreign demand "does contribute to price increases that are driving the rise in household indebtedness."

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However, the report said data on the intensity of foreign real estate investment is particularly poor.

The document said year-over-year house-price growth in the greater Vancouver area hit 30 per cent last month, up from 15 per cent in December. In Toronto, prices increased 15 per cent, compared with 10 per cent six months ago.

How significant a role foreign money plays in overheating Vancouver's market has been the subject of endless speculation in the city.

But Finance Minister Mike de Jong has made it clear that the data collection is an effort to prove foreign investment isn't as big a factor as anecdotes would suggest.

Mr. de Jong did not address the bank's declaration that foreign investment is playing a role.

Instead, in an e-mailed statement, the Finance Minister called the central bank's latest report balanced, noting its continued assessment that the probability of a downturn in the near term remains low.

Vancouver Mayor Gregor Robertson said in an e-mailed statement that he was encouraged by Mr. Poloz's comments, which come several days after he once again urged the provincial and federal governments to cool off the fiery sales activity in Vancouver and its surrounding suburbs.

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"Unregulated, speculative global capital is having a clear impact on our housing market, and tools like a speculation tax and a luxury sales tax would help create a more stable market, and create more affordability for our residents," Mr. Robertson's statement read.

"All levels of government need to be wide awake to the economic risks posed by the disconnect between Vancouver's local incomes and rising housing costs, which are pushing unprecedented levels of household debt on families."

He added that the issue finally seems to be on Ottawa's radar, noting Finance Minister Bill Morneau's announcement this week that the federal government had started a "deep dive" into the factors driving the country's housing markets to determine which measures might be necessary to ensure Canadians can still afford to buy homes.

That study will focus on the typical economic forces such as housing supply, a shifting labour market, population changes, but also foreign investment, he said.

Mr. Morneau declined to say when the government might be ready to reveal more detailed data on the role of foreign buyers on Vancouver or Toronto's surging prices, nor would he say whether this would be a focus of any policy actions by the government.

Over the winter, he increased the minimum down payment for homes over $500,000 to 10 per cent from 5 per cent, a measure aimed specifically at cooling off the Toronto and Vancouver markets.

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Penny Gurstein, who directs the University of British Columbia's school of community and regional planning, said the federal government will continue to be reluctant to slow foreign real estate investment in these two cities, which is one of the Canadian economy's few strengths right now.

"The government is not doing this because they feel like this may be the only game in town and that might be very well borne out," she said.

With a report from The Canadian Press

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