07/15/2016 08:39 EDT | Updated 07/15/2016 09:59 EDT

Vancouver, Toronto Home Prices Being Hiked By Foreign Money, BMO Says

But you'll hear a different theory if you ask someone else.

Is foreign money the driving factor behind skyrocketing home prices in Toronto and Vancouver?

Yes, if you ask BMO chief economist Douglas Porter.

He issued a chart Friday in an effort to confirm the role of foreign money in rising property values.

(Chart: Bank of Montreal)

The chart shows that, historically, house prices tracked growth in mortgage borrowing. (The big exception being during the 2008-09 financial crisis, when house prices fluctuated wildly.)

But now house prices are spiking upwards, even as mortgage borrowing has slowed from a few years ago.

"Something besides domestic borrowing has clearly fanned the flames. We will simply note the anecdotal evidence that many foreign buyers do not borrow to buy," the economist wrote.

Vancouver's False Creek. (Photo: Kim Rogerson via Getty Images)

Porter's analysis came in response to an analyst who had said that blaming foreign money for the house price spike is "complete nonsense."

The Financial Post attributed that quote to Paul Ashworth, an economist with Capital Economics.

Last month, Ashworth issued a report that laid the blame for house price growth solely on borrowing. He, too, issued a chart to press his point.

(Chart: Capital Economics)

"The massive surge in risky debt being taken on by Canadian households illustrates that the housing bubble can't be blamed on cash purchases by foreign investors," he said.

This isn't the first time that Porter has taken aim at fellow observers of Canadian real estate.

In March, he published a chart titled, "Canada's Non-Goldilocks Housing Market and the 33 Bears."

It took aim at predictions for Canadian real estate, such as that home prices would crash by 25 per cent. Porter argued that the "scaremongers" had so far been proven "dead wrong."

That prediction of a 25-per-cent price drop was also made by Capital Economics. But subsequent predictions by other observers have been even more bearish.

Vancouver hedge fund manager David LePoidevin recently told The Huffington Post Canada that the city's housing market could drop by as much as 50 per cent.

Ex-Wall Street short seller Marc Cohodes, meanwhile, believes it could fall by up to 70 per cent.

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