I heard the 'bubble will burst' scare for the past 30 years, if not more. And it never did; there were some temporary price drops and demand swings, but nothing, that would alter the old real estate axiom: "prices will always rise on the long run, because the supply will always be limited".
All 3 levels of governments are complicit in what we see today.
The City administration should have NEVER allowed infills in established neighbourhoods without controlling (strictly!) what is being built to replace what was there before; no severing of a building lot to allow 2, or more structures to replace one.
The Provincial governments shouldn't have allowed creeping subdivision development gobbling up arable farmland.
And the Feds should have put rules and regulations in place long time ago, not by tweaking with mortgage lending, but rules with teeth, such as mandatory building starts within 2 years; vacant lodging tax; excise tax on foreign buyers; raising the capital gains tax.