Developers in Toronto are building 97 residential towers, more than any other city in North America, with several luxury high rise developments being funded by foreign investors from China and India. Investors are attracted by Canada’s world leading urban centres, and housing values that are considered attractive despite experts warning that prices in Ontario could be overvalued by as much as 25%.

“The private equity that was injected was all foreign, predominantly from India, China and Israel. And of course the UK, but the source of the UK money is really from India says a real estate insider.

Several Canadian cities feature in the top ten best cities to live in, as ranked by the Economist Intelligence Unit global “liveability” study. And so it is no surprise that Canada is fast becoming a favoured destination among wealthy foreigners interested in buying urban housing properties, especially as housing prices in Canada’s big cities are considered especially attractive. A middle-class house can be purchased for $550 to $750 per square foot in new developments in Toronto. Even the luxury properties on Bay Street are cheaper compared to similar houses in other big cities around the world.

Real estate experts say the building boom in Toronto has been going on for the past five years. And with Canada’s housing market for investors remaining stable, foreign interest is set to remain strong, especially as the limited housing supply is contributing to double digit price increases in top tier cities like Toronto. House prices recorded an increase of 10% on an annual basis in Toronto this past March.

In terms of the top destinations for wealthy Chinese investors, Canada ranks third, far behind the US and Australia, but is believed to be fast catching up with new real estate projects coming up in Ontario, and more recently in Vancouver too. Statistics Canada estimates that this year will see 34,500 newcomers settling in British Columbia, and the numbers will go up to 45,000 in the next three years. Most of them (about 65%) are expected to arrive from Asia, mostly China, and will push up the demand for quality properties in the region.

“It all comes down to net migration of Canadians moving to Vancouver, foreign immigration and foreign ownership. There’s a lot of money changing hands here,” says a Vancouver-based property expert.

In 2014, 25-30% of properties in West Vancouver were bought by foreign investors, mostly from China, and this percentage is expected to increase as the Chinese government allows its citizens the freedom to access international markets.

“A lot of our Chinese buyers have been living in Canada almost all of their lives and have businesses still in China, through family. They didn’t sever ties with the mainland. So what we are seeing in Canada, with the currency weaker that it has been at 80 cents to the dollar, they have had the extraordinary benefit of growth in China in the past and they are still participating in the growth in China today. A lot of that money trickles back in to real estate,” says a property expert.

And this is despite warnings by International Monetary Fund (IMF) last year that the property market has ‘overheated’.

The real estate sector in both Toronto and Vancouver continues to see steady growth, and with plenty of optimism among developers and investors, experts predict there is little chance of a slowdown in the foreseeable future.