We live in the Annex in Toronto which is one of these highly sought after areas. There's no bubble here. Not yet at least. Why? Because there's absolutely nothing for sale here. So far at least, it's the lack of supply all the while the greater GTA experiences 100k year over year population growth. There're many houses on the market that are junk that do not sell in this market. 

People will pay top dollars but they have to be in near perfect move in condition in a great neighbourhood. This explains the $1 million dollar headliner for bungalows. These are bought by builders that are feeding the $2+ million new home market which I think isn't that large. Essentially, a lot in downtown Toronto in a decent neighbourhood starts at $1 million.

And btw, your rental figure is way off. It's more like starting at $4-5,000 per month.