Temperatures aren’t the only thing on the rise this spring. Housing markets in Toronto and Vancouver are on track to continue their record-breaking hot-streak.

And while there is little that seems it could de-rail Canada’s housing sector, some worry home buyers desperate to get into the market could be planting the seeds of a bubble.

“When you see price growth start to enforce price growth then we tend to get into your typical bubble situation and that’s when things get concerning for us,” says Robert Kavcic, Vice President and Senior Economist at BMO Capital Markets.

A detached home in Toronto costs about $1.2-million – up more than 12% from last year, according the Toronto Real Estate Board. A similar home in Vancouver will run you $1.3-million, up a whopping 27%, according to figures from The Real Estate Board of Greater Vancouver.

Those price spikes have been largely driven by a lack of supply, says Kavcic. That’s not the case in parts of the Vancouver condo market that have also seen substantial price increases lately.

"That really is not justified by the supply and demand fundamentals,” he says. “That might be one of the early signs that the wheels are starting to spin a little bit."

For the most part, Canada’s hot housing market is being driven by fundamental demand, and there is no indication home buyers will be hit with higher interest rates, or an economic shock that could cool the market, says Kavcic.

And while Toronto’s housing market has strong fundamentals, frustration from homebuyers who have lost out in bidding wars is contributing to higher home prices, says Mark McLean, president of the Toronto Real Estate Board. “These are people who have lost out on a number of offers, they are tired and frustrated and they just push everything they have at it to get it,” he says.

New mortgage and down payment rules imposed by Ottawa in February have done little to cool hot markets in Toronto and Vancouver, says Rob McLister, Editor of Canadian Mortgage Trends. “It’s hardly making a dent, all price points are showing significant strength,” he says.

If Canada’s housing market continues to heat up, Ottawa may be forced to act, he says. “There are still some tools in the toolbox that (Ottawa) could use and you better believe if home prices make more records in the next few months - they are going to use those tools.”