To put it simply: Canada's housing market was on fire in March, with home sales setting a new all-time record to mark the highest level of activity of any month -- not just any March, but any month -- in history.

Home sales climbed 5.2% between February and March, with 76,259 residential properties trading hands -- up 76.2% from 43,283 during the same period last year. This is also nearly 14,000 more sales recorded than the previous record set last July, according to the Canadian Real Estate Association (CREA).

The month-over-month increase in national sales activity was broad-based and generally in line with locations where more new listings became available, with sales gains most seen in Greater Vancouver, Calgary, Edmonton, Hamilton-Burlington, and Ottawa.

The national real estate association says the influx of sales activity was likely the result of an increase in new supply, as the number of newly-listed properties jumped another 7.5% month-over-month to 105,001, a more than 50% increase from 69,665 last March. Combined with February’s big rebound, new supply is up more than 25% in the last two months.

READ: Aggregate Price of a Home in Canada Expected to Break $800K This Year

With the rebound in new supply outpacing recent gains in sales, CREA says the national sales-to-new-listings ratio eased back to 80.5% in March compared to a peak level of 90.9% set in January. The long-term average for the national sales-to-new listings ratio is 54.4%, so it is currently still very high historically.

“Seeing how many homes were bought and sold in March 2021, one could be forgiven for thinking the market just continues to strengthen, and maybe to some extent it is,” stated Cliff Stevenson, Chair of CREA.

“The real issue is not strength in housing markets but imbalance. That demand has been around for months, but with the shortages in supply we have across so much of Canada, a lot of that demand has been pressuring prices. So the big rebound in new supply to start the spring market is the relief valve we need the most to get that demand playing out more on the sales side of things and less on the price side," said Stevenson.

That said, Stevenson says it will take a lot more than one month of record new listings, though, "it looks like we may finally be rounding the corner on these extremely unbalanced housing market conditions."

CREA says the average price of a home sold in Canada during March was $716,828, up 31.6% from $544,824 during the same time last year.

Hash Aboulhosn, President of Windsor, Ontario-based Edison Financial, says "the rising home sales in March is encouraging because it means people across Canada were able to find the home they were looking for - that isn’t as easy as it sounds in many of the hottest markets."

"The intense competition for the limited number of homes on the market is leading to surging prices. Thankfully home listings are starting to increase, but my hope is that rising prices will encourage more homeowners to list their home, taking advantage of their new-found equity and adding much-needed inventory for eager homebuyers,” added Aboulhosn.

Shaun Cathcart, CREA’s Senior Economist suggests that as the uncertainty from COVID winds down, some homeowners who wouldn't sell during the pandemic will emerge with new properties to list for sale, with some of the urgency on the demand side easing -- which could address the pent-up supply issue.

“We’ll only know in the fullness of time, but March certainly did nothing to disprove the idea. That said, the third wave of COVID-19 could throw a wrench into the works of a potential supply recovery this spring,” added Cathcart.