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Homes on Phoebe Street in downtown Toronto are pictured on May 17, 2016.Fred Lum/The Globe and Mail

House sales in the Toronto region surged in August as buyers snapped up a dwindling number of listings.

There were 9,813 properties that changed hands last month in the Greater Toronto Area, up 23.5 per cent from the same month last year.

"There is no denying the underlying strength," Bank of Montreal chief economist Douglas Porter said in an interview on Wednesday. "Sales were almost as high as active listings."

The number of active listings fell to 9,949 in August, down 37.8 per cent from the same month in 2015, according to the Toronto Real Estate Board. While prices have slipped since the spring, Mr. Porter said the key is that the market is much stronger year over year. The average price for all types of housing in the region reached $710,410 in August, up 17.7 per cent from a year earlier.

Industry observers are watching for the ripple effects from the B.C. government's decision to implement a 15-per-cent tax on foreign buyers in Metro Vancouver, effective Aug. 2. Housing experts are looking for signs that some buyers from abroad will turn their attention to Toronto.

Mr. Porter said foreign investment plays a notable role in the Toronto market, though it is unclear how much. The real estate board confirmed on Wednesday that it will be releasing results from its fall study into the extent of foreign buyers in the Toronto region. The board will also examine issues that affect housing supply.

The sales data for the Greater Toronto Area includes two more working days in August than in the same month of 2015, so adjusting for the discrepancy, sales rose roughly 13 per cent over the past year, the board noted. August sales dipped slightly from 9,989 properties that sold in July.

The average number of days on the market for a residential property to sell has declined over the past year to 18 days from 23 days.

"It's too soon to be assuming a dramatic shift from potential buyers in B.C. suddenly snapping things up in Toronto," Mr. Porter said.

Toronto-Dominion Bank economist Diana Petramala said prices have risen sharply over a 12-month period in Toronto, but when foreign buyers ponder detached houses internationally, Toronto is still more affordable than Vancouver.

"Foreign interest has been slipping in Vancouver, mostly in the luxury home market," she said. "There already was a shift from Vancouver to Toronto. The new B.C. tax adds an additional factor and reinforces the trend."

The average price for a detached house sold in August within the City of Toronto climbed 18.3 per cent over the past year to $1.21-million and is up 0.3 per cent from July. By contrast in the City of Vancouver, the price for a detached property averaged $2.6-million in August, up 11.1 per cent from the same month in 2015, but down 11.6 per cent from July.

Marc Pinsonneault, senior economist at National Bank of Canada, said that given the modest increase in average price for detached houses month over month in Toronto, there does not appear to be a major influx of foreign capital eastward as a result of the introduction of the B.C. tax.

The real estate industry argues that a better measurement of trends is the composite benchmark price, which is a representation of the typical property sold in an area.

In Greater Toronto, the benchmark price has jumped 17.2 per cent over the past year to $662,300 for detached, semi-detached, condos and townhouses. The benchmark price for all types of housing in Greater Vancouver hit a record $933,100 in August, up 31.4 per cent from a year earlier.