The benchmark price for Greater Vancouver detached home (excluding Surrey, North Delta and Langley) jumped nearly 28 per cent over the past year to $1.29 million in January, according to the latest figures released by the Real Estate Board of Greater Vancouver.

There is plenty of speculation about the forces driving Vancouver's red hot real estate market, but according to the board's president Darcy McLeod, it ultimately comes down to basic supply and demand.

"Fundamental economics are driving today's market. Home buyer demand is at near record heights and home seller supply is as low as we've seen in many years," said McLeod.

The total number of properties, including apartments and attached homes, listed for sale on the MLS system in Metro Vancouver in January was 6,635, a 38.6 per cent decline compared to January 2015 when 10,811 homes were listed.

The benchmark price reflects what the board considers to be a typical home in the area, and is different from the average selling price of homes in the market, which can be skewed by the sale of a few very expensive homes.

When the sales of the region's luxury home market are included in calculations, the average selling price for a Metro Vancouver home hit a record high of $1.8 million in January.

But it is not just luxury homes that are driving up the price of the average home. Last week a rundown home on Vancouver's West Side made headlines when it was listed for $2.4 million.

Yesterday Premier Christy Clark announced B.C. Housing would be conducting a study of the level of foreign investment in the real estate market.