A new report by the TD Bank Financial Group says Vancouver and Victoria are the two Canadian cities at greatest risk of a potential housing bubble.

The report by TD economist Carol Gomez says speculative buyers and investors are driving up prices in beyond justifiable levels in the two B.C. cities.

And he says a key Vancouver indicator shows that it's now cheaper to rent than to own a benchmark property – a townhouse – in the city.

Gomez's report says the city's geographical location and the expected economic benefits from the 2010 Olympics are driving up Vancouver housing prices.

But David Barclay, the president of the B.C. Real Estate Association, disagrees with Gomez's conclusions that Vancouver housing prices are over-inflated.

"Housing is supply and demand. And right now we've got a super vibrant economy. And when we've got a healthy economy, we've got demand. And I don't see the economy slowing down."

Tsur Sommerville, who teaches real estate at the University of British Columbia, agrees that Vancouver has a healthy housing market.

But he does say the city's housing boom will start to slow down at some point.

"The house price increases that we've seen in the last couple of years are not sustainable in the long term. So you know that's going to end."