Canada

The houses get bought by the slightly richer class, demand for a house doesn't stop here when we have tens of thousands of new people moving to vancouver area every year. It means people pay drastic rent or , sublet half their living room has a living space, with the hope of getting into the market. Rates and price inflation prevents those wanting a home to actually aquire one. As soon as somebody does eek out enough they are competing in bidding wars here because of a housing shortage. Shortage produces upward pressure on pricing in every market including housing. Nobody is setting fake high prices thereby curbing demand. The prices are that high because it will get sold at that price, the demand is there for it. We need more units, more density, and stop letting people have vacant homes. Once that happens the market will deflate because there will be leas demand on available supply of units. i would agree with you if we had un sold units sitting on the market forever and then you can say demand is low, But we don't have that here, we have a shortage of dwellings.