The year-over-year rise in the price of Canada's housing in the second quarter of 2015 is one of the highest in the developed world, largely because of low interest rates, according to a report from Scotiabank.

At 8.3 per cent, it lags markets such as Ireland (13.3 per cent) or Sweden (10.1 per cent), but is well ahead of the U.S. (5.4 per cent) or U.K. (5.6 per cent).

The low Canadian dollar is increasing foreign demand for Canadian real estate, especially luxury real estate, said economist Adrienne Warren.

"Traditionally, popular markets for foreign buyers include the U.S., the U.K., Australia and Canada," Warren said in a report on global property trends.

Low dollar makes Canadian housing cheap

"Foreign exchange considerations are taking on a bigger role, increasing the attractiveness of properties in countries whose currencies have weakened at the expense of relatively stronger currency markets in the U.S. and the U.K."

Australia and Canada are among the countries that have seen a weakening currency and an escalation of housing prices this year, especially in big urban markets such as Sydney and Melbourne.

Australian prices are up 8.3 per cent on the year, putting Canada in fourth place among the world's hottest markets.

Sydney now has the same affordability crisis that Vancouver is experiencing, with the median house price over $1 million Australian. With wealthy Chinese buyers finding property cheap, even after the devaluation of the yuan, there is continuing potential for prices to be pushed upward, especially luxury prices.

Australia's housing bubble

At the same time, there is talk of a housing bubble, with Goldman Sachs estimated Sydney prices are overvalued by 20 per cent.

Sound familiar? Talk of a housing bubble persists in Toronto and Vancouver, with even the Bank of Canada noting prices may be too high.

Warren doesn't believe it's foreign buyers who are driving up prices, but rather Canadians who are chasing after a limited supply, especially of single-family homes.

"The housing market in Canada has held up stronger than most of us expected over the past year, but then you have to keep in mind it's primarily because of the hot Vancouver and Toronto market that's driving up prices," she told CBC News.

"People want to live closer to where the jobs are and they don't want to take on long commutes."

Canadian housing demand has defied general weakness in the economy, in part because of low interest rates, she said, but the market is very uneven from city to city.

Ireland on a tear

Among the other countries with higher house price inflation than Canada, Ireland is an interesting example.

Its housing prices were soaring in 2007 when the financial crisis left Ireland debt-burdened and near bankruptcy. But the Celtic Tiger seemed to have recovered its moxy in 2013, when it exited a bailout program, and has been growing ever since.

The housing market plunged from 2007 to 2012, but began rising in 2013-14, with a sharper increase in the past year.