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2017-02-15 Douglas Porter Douglas Porter It's the first time, in years of debate on the issue, that an economist at a major Canadian bank has declared themselves on the side of the bubble-believers.

Porter's comments came as the Canadian Real Estate Association issued its January numbers, showing Greater Toronto's benchmark house price rising 22.6 per cent over the past year, to $705,900.

Toronto house prices are seeing "the fastest increase since the late 1980s – a period pretty much everyone can agree was a true bubble," Porter wrote.

Porter suggested that, despite what the industry is saying, there is little evidence of an overall supply shortage.

"Housing starts in Toronto and Vancouver have been chugging along at almost 70,000 units per year recently, an all-time high, while overall Canadian starts are above demographic demand at 200,000 units in the past year," he wrote.

"And, we are seeing near-20-per-cent price gains in Toronto condo prices, where supply constraints are not a major issue" Porter continued.