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With Vancouver feeling the effects of a tax on foreign buyers, international investors are turning to pricey real estate in B.C.’s quaint provincial capital.

So much so, in fact, that the city now ranks among the world’s top two luxury property markets.

Victoria ranked second on a list of the world’s hottest luxury markets for 2016 in a report released by Christie’s International Real Estate and Chestnut Park Real Estate of Toronto on Wednesday.

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The city’s ranking represented a climb from third place in the 2015 report; it didn’t rank among the hottest markets in 2014.

And it’s a ranking that came in a year that was its “best ever” for luxury home sales.

The legislature building in Victoria, B.C. Danita Delimont / Getty Images

One of the biggest reasons that Victoria showed up in second place was that international buyers are being “deterred by nearby Vancouver’s new 15 per cent tax on overseas capital.”

But Victoria was just one of a number of Pacific Rim markets that showed up high on the rankings.

“Relatively strong local economies alongside national and overseas migration and capital inflows were key contributors to growth in these ‘hot’ luxury property markets,” the report said.

READ MORE: B.C. foreign buyers tax really did yank down Vancouver home prices: BMO

Luxury home sales in Victoria are just one sign that the B.C. foreign buyers tax is having impacts beyond Vancouver, it added.

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Any shift in city-level policies “can have a ripple effect on the fortune and purchasing patterns of international buyers.”

And this is far from the first report to suggest an uptick in home sale activity (and prices) in Victoria following the tax’s introduction.

Earlier this year, BMO published a chart showing that prices dropped in Greater Vancouver but kept trending up in Victoria.

This chart shows that Vancouver home prices started dropping pretty clearly after July 2016, which was the last month before B.C. instituted a property transfer tax on foreign buyers. BMO

As it happens, Toronto reclaimed its spot atop the list of the world’s hottest luxury home markets after falling to second place in 2015 and topping the list in 2014.

The rankings were determined by looking at factors such as the growth in sales for homes worth $1 million or more, as well as how many days such properties were spending on the market.

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READ MORE: Soaring house prices in Toronto ‘deeply troubling’ for homebuyers: mayor

Home price trends like this often give rise to concerns about whether a city is in a housing bubble.

Indeed, the Canada Mortgage and Housing Corporation (CMHC) recently said that Victoria is showing moderate signs of overheating; so is Toronto.

There are also plenty of questions about whether such price increases can be considered a good thing.

“Depends on if they own (and don’t care about their offspring’s ability to buy into their market too much, then it’s great news) or rent (then it’s not as great news),” UBC Prof. Tom Davidoff told Global News in an email. Tweet This

But Toronto and Victoria weren’t the only cities that ranked among the world’s hottest luxury housing markets.

Here are the top 10 as listed by Christie’s and Chestnut Park Real Estate of Toronto:

10) San Diego

In this Nov. 25, 2009 file photo, The BMW Oracle trimaran sails past the San Diego skyline during testing in San Diego. AP Photo/Lenny Ignelzi, File

9) Sydney

People attend a yoga event in front of the Australia’s iconic landmark Opera House in Sydney on June 21, 2016. Wendell Teodoro/AFP/Getty Images

8) Portland

The Portland skyline is visible through trees on the east bank of the Willamette River in Portland, Ore., Wednesday, Dec. 3, 2014. (AP Photo/Don Ryan)

7) Paris

The Eiffel Tower is seen at sunset in Paris, France, Sunday, April 12, 2015. THE CANADIAN PRESS IMAGES/Jeff McIntosh

6) Auckland

The Sky Tower lit up blue in Auckland, New Zealand. David Rowland / Rex Features via The Canadian Press

5) Charleston, S.C.

Charleston, S.C. Wikimedia Commons user Melizabethi123

4) Austin, Texas

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Austin, Texas. Wikimedia Commons user Argash

3) San Francisco

In this photo taken Tuesday, Dec. 8, 2015, a jogger goes past the Warming Hut Cafe with the Golden Gate Bridge in the background in San Francisco. AP Photo/Eric Risberg

2) Victoria

The Fairmont Empress in Victoria. Fairmont Hotels and Resorts

1) Toronto

The CN Tower is barely visible amidst the looming grey clouds in these photos taken on June 30, 2015 in Toronto\’s downtown core. File photo