Home sales across the country hit a record high last month, propped up by transactions in the fiercely hot market of Toronto, further fuelling concerns about the city's real estate sector.
The Canadian Real Estate Association said Tuesday home sales over its Multiple Listings Service system increased by 1.1 per cent in March to top the previous monthly record set in April 2016. On a seasonally adjusted basis, sales totalled 46,353, up from 45,856 in February.
Bank of Montreal chief economist Doug Porter said where you stand on the issue of Canada's housing market depends on where you live.
"Almost the entire province of Ontario's housing market is now on fire, while most of the rest of the country wonders what all the fuss is about," Porter wrote in a research note.
Policy-makers, think tanks and the Bank of Canada have issued repeated warnings that while concerns of an overheated housing market may be confined to the Toronto area, a correction could have repercussions for the national economy given the sheer scale of the city's real estate industry.
The latest sales data came ahead of a meeting between Mayor John Tory and the federal and Ontario finance ministers to discuss soaring home prices in the Greater Toronto Area, which have leapt by more than 30 per cent in the last year.
The actual national average price for homes sold in March this year was $548,517, up 8.2 per cent from a year ago. Excluding Greater Vancouver and Greater Toronto, the average price was $389,726.
Compared with a year ago, actual sales in Canada, not seasonally adjusted, were up 6.6 per cent. Gains in the Greater Toronto Area led the way with a 17.0 per cent increase.
But it wasn't just Toronto posting whopping hikes.
Sales in the Ontario cities of London and St. Thomas increased 44.4 per cent compared with March 2016, while in the Niagara region they grew by 30.0 per cent. Ottawa climbed 28.6 per cent.
Sales in Greater Vancouver, once the country's hottest real estate market, fell 31.5 per cent compared with a year ago. But the region was up 4.1 per cent on a month-over-month basis.
CIBC deputy chief economist Benjamin Tal said it looks like the Vancouver market has hit bottom and started to recover.
Sales in Vancouver cooled last year in the wake of a tax on foreign buyers. Tal said the drop was due to domestic buyers waiting to see what the impact of the tax would be, but they are now back in the market.
"I think Vancouver will see a very strong spring," he said.
CREA said the number of newly listed homes increased 2.5 per cent in March, led by gains in the Toronto region, Calgary, Edmonton and B.C.'s Lower Mainland.
The national sales-to-new listings ratio was 67.4 per cent in March compared with 68.3 per cent in February. There were 4.1 months of inventory on a national basis at the end of March 2017, down from 4.2 months the month before.