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A sold sign is posted on a real estate sign outside a home in the East end of Toronto near Woodbine and Danforth Avenue on Jan. 23, 2020.Deborah Baic/The Globe and Mail

Toronto’s housing market bucked the typically slow winter month of January, with sales rising and increased competition for homes pushing up the average residential sale price.

Home sales in the Greater Toronto Area reached 4,581 last month, according to the Toronto Regional Real Estate Board, a 15-per-cent increase over January last year, when activity slowed because of tougher borrowing rules, higher interest rates and a 15-per-cent tax on foreign buyers of real estate.

“We are starting to see a really big turn in the market,” said Shawn Zigelstein, realtor with Royal LePage Your Community Realty.

January’s sales growth was the 10th consecutive month of year-over-year percentage increases, and occurred as fewer homes were listed for sale. The slim inventory helped drive up the average selling price of a home to $839,363 last month from $747,175 a year ago. It was up slightly from December’s average price of $838,344.

“Tighter market conditions compared to a year ago resulted in much stronger growth in average selling prices," real estate board president Michael Collins said in a statement accompanying the results.

The average price of most types of housing increased across the Toronto region, with the value of detached houses and condos soaring in the city. The average selling price of a detached house in the the city jumped 17 per cent compared with the previous year, to $1,369,848. The average selling price of a condo rose 15 per cent to $679,182.

In the surrounding suburbs, the average selling price of a detached house was up 9 per cent, over the previous year, to $957,287 and the average condo price climbed 14 per cent to $521,878. The only type of housing to register a slight decline in value were townhouses in the city of Toronto.

Since late last year, industry experts have been warning that prices would continue to rise because of the lack of homes for sale. Jason Mercer, the board’s director of market analysis, reiterated that “constrained supply continues to result in an accelerating rate of price growth.”

January was an unusually hectic month, with realtors describing scenes reminiscent of 2017 when potential buyers flooded the market and made offers well over the asking price.

“Multiple offers are returning,” Mr. Zigelstein said. The realtor said one property in the suburb of Brampton received about 35 offers. He said the house needed “complete remediation,” but buyers were “in love with it.” Mr. Zigelstein said the house sold for about $570,000, about $100,000 over the asking price.

Although the tougher borrowing rules have been in place for two years, realtors say many buyers who were on the sidelines are now interested in purchasing.

“A lot of people are potentially concerned that the market may take off like it did in 2016 and 2017 and they are trying to get ahead of it,” Mr. Zigelstein said.

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