After a year of lockdowns, activity in the province's housing market is booming, particularly in the 905-area surrounding Toronto, where prices and sales continue to soar, as homebuyers continue to look for more space.

For the third straight month of 2021, record home sales continued in March across the Greater Toronto Area (GTA), after 15,652 sales were recorded – nearly double the 7,945 sales recorded in March 2020, according to the latest data from the Toronto regional Real Estate Board (TRREB).

Last month's total transactions were bolstered by activity in the 905-area, where 10,418 home sales were recorded -- including detached, semi-detached, townhomes, and condos.

Of this total, detached homes were the driving factor of activity, with 6,127 transactions recorded -- a staggering 111.6% increase from March 2020. Though, it's important to remember that this was a time when the initial impacts of COVID began to be felt and sales activity dropped dramatically across the province.

READ: GTA Home Sales Up 97% in March, Average Selling Price Hits $1.1M

Detached home sales were followed by 2,076 townhouse sales -- a 90.5% increase from March 2020; 1,207 condo sales -- up an impressive 99.2% year-over-year; and semi-detached homes, with 1,008 sales -- a 95% increase from the same time last year.

Lisa Patel, TRREB President, said confidence in economic recovery coupled with low borrowing costs helped support the record pace of home sales last month.

“While the robust market activity is indicative of widespread consumer optimism, it is also shedding light on the sustained lack of inventory in the GTA housing market, with implications for affordability,” added Patel.

Speaking of affordability -- or a lack thereof -- detached home prices in the 905-area continue to climb the highest: up 31.4% annually to an average of $1.32 million in March -- that's an increase of $314,571 over the last 12 months, or $26,214 per month. This compares to a 19.2% average price jump to $1.75 million for a detached home in Toronto, just shy of $285,000 over the last 12 months, or approximately 23,700 per month.

As sales growth continues to outstrip listings growth by a large margin, TRREB chief market analyst Jason Mercer says the competition between buyers in some market segments -- coupled with the potential for double-digit price growth -- could continue without any significant increase to the number of homes available for sale.

Though, despite this, the board is warning governments against new policies to cool housing demand.

“Policies such as a capital gains tax on primary residences can have a short-term impact, but can also be fraught with unintended consequences like further stifling the supply of listings,” warned board CEO John DeMichele.

“We have been saying for too long now that policymakers must focus on the long-term goal of increasing housing supply in order to accommodate current and future demand,” added DeMichele.

While some industry professionals have called for government action to rectify the housing situation — which has already been labelled as a “national concern,” others agree with DeMichele and say that policymakers need to be "cautious" with any cooling measures.

In a joint statement from Christopher Alexander, Chief Strategy Officer and Executive Vice President at RE/MAX of Ontario-Atlantic Canada and Elton Ash, Regional Executive Vice President at RE/MAX of Western Canada, the real estate professionals asked governments to be cautious with cooling measures such as policies and taxes that have served as short-term fixes in the past but have not provided a long-term solution to Canada’s housing affordability crisis.

“Furthermore, the pandemic lockdowns have already had a huge impact on the supply of listings available for sale, so we urge our government to carefully consider any new measures that could potentially reduce supply even further,” says Alexander.