With the Vancouver housing sector currently experiencing a 10 per cent price correction in the wake of B.C.’s new tax on foreign home buyers, Toronto has taken over as Canada’s most dynamic and fastest growing real estate market, according to a veteran markets observer.In a contribution piece for The Globe and Mail, TD Bank economist Diana Petramala cited the latest numbers from the Toronto Real Estate Board, in particular the 18 per cent year-over-year growth in home prices last month.“Toronto’s appreciation in average home prices since early 2015 has now exceeded Vancouver’s,” the analyst wrote.Among the major factors in this rise are the robust economic fundamentals in the region, Petramala said.“Employment growth so far this year is running at about 3 per cent year-over-year, more than triple the national pace,” she explained. “And the population between 30 and 40 (those in the first-time buying stage) has been growing rapidly over the past two years, contributing to a large pool of pent-up housing demand.”“We also can’t ignore the city’s attractiveness to foreign purchasers. A quest for yield around the world will remain supportive to real-estate investment.”Another advantage that bodes well for Toronto’s prospects as the top housing destination in Canada is its relative affordability compared to Vancouver and other leading global markets, Petramala stated.“The combination of strong domestic and foreign demand, coupled with tight supply conditions, is likely to continue to keep Toronto home prices rising at a double-digit pace through the rest of the year and into early 2017,” the analyst said. “The additional land-transfer tax on non-residents in Vancouver will also likely prompt more foreign buyers with an interest in Canada to set their sights toward Toronto.”However, significant risks are looming just beyond the horizon, Petramala warned.“[Next] year is likely to be a different story,” she wrote. “The Toronto market has become even more sensitive to higher interest rates than in the past. So even small movements in mortgage rates next year will help to take the steam out of housing activity.”“The Toronto market will eventually cool. The question mark is whether the trigger will be higher interest rates or policy action.”