February was a record-setting month for the Greater Toronto Area (GTA) housing market for a number of reasons.

Case in point: A record number of home sales were recorded and the average price -- across all home types -- eclipsed the $1-million mark for the first time in history.

But perhaps most notably, February was a record-breaking month for the most GTA residential sales volume sold on the MLS, for any month ever, with $11,468,007,390 in sales recorded.

According to the Toronto Regional Real Estate Board (TRREB), 10,970 homes changed hands in February -- a 52.5% increase compared to 7,193 sales reported in February 2020 -- which was fuelled by 4,943 detached home sales in the 905-area outside of Toronto -- a growing trend as homebuyers continue to look for more space as they work from home.

This came as the average selling price for all home types in the GTA was up 14.9% to $1,045,488. While market conditions were tight throughout the GTA last month, the detached, semi-detached, and townhouse market segments in suburban areas were the drivers of average price growth, with annual rates of increase above 20% in all three cases.

READ: Is This the Year the GTA Real Estate Bubble Bursts?

Toronto realtor and chartered accountant Scott Ingram says over the last ten years when looking at 416-area sales volumes, February is the third-lowest volume month on average. Though, he added that he suspects this applies to the entire GTA.

Ingram told STOREYS, "It is remarkable that a 28-day month, which is normally the third slowest month in the year, has set that record."

As Ingram pointed out, it takes "massive" monthly volumes and huge enough price climbs to make this happen -- which was apparent last month, as double-digit annual price growth was the norm throughout the GTA, with stronger rates of growth in the suburbs surrounding Toronto.

According to Ingram, there are seven $10 billion-plus months on record -- five of which occurred amid the pandemic, which just goes to show how hot the Toronto-area housing market has been over the past year.

  • February 2021: $11.47B
  • March 2017: $10.49B
  • September 2020: $10.60B
  • April 2017: $10.52B
  • July 2020: $10.41B
  • August 2020: $10.22B
  • October 2020: $10.17B

To further put last month's residential sales growth in perspective, Ingram says February is the shortest month of the year, and there were only 19 business days last month. This March has 23, for example (so 21% more business days, 11% more calendar days).

READ: Is This the Year the GTA Real Estate Bubble Bursts?

While home prices and transactions in the region continue to soar to record-breaking heights, it raises the question of how long these trends will last.

As demand continually outpaces supply and home prices steadily increase, there are now early signs of overheating in Canada’s housing market.

Though, despite these signs of overheating, Bank of Canada Governor Tiff Macklem says so far there are no plans to raise today’s historically low interest rates (they currently sit at 0.25%) until the economy and employment are back on track following declines caused by COVID-19.

Macklem explained that the rebound in activity is being driven by the sales of single-family homes outside of large city centres.

“We’re all spending more time at home, people are working at home, they want more space, they don’t have to commute, and they figure their employers are probably going to be more flexible about the need to go into work every day, so they’re moving out of the downtown core,” said Macklem, adding, “they’re getting more space and that’s driving up prices particularly outside of our largest cities for single-family homes. ”

As such, Macklem said there are now early signs of what he called “excess exuberance,” though, it’s not like what was felt in 2016 and 2017 when multiple government measures were introduced to cool down the housing market.

Senior Economist of RBC Economics Robert Hogue says – though we’re not there right now – the risk of a real estate bubble has increased as the pandemic has played out.

“The sort of dynamics we’re seeing could be the early signs that the market is heating up: much more frantic activity, much more fear of missing out, and accelerating prices,” says Hogue. “That could start to feed on itself, if speculators start to get into the game because they’re making let’s-see opportunities for quick money. But there are certainly some dynamics that are worth monitoring very closely.”

Hogue isn't alone in saying the situation should be closely monitored, as Macklem also says the Bank of Canada will be keeping an eye.

“What we get worried about is when we start to see extrapolated expectations when we start to see people expecting the kind of unsustainable price increases we’ve seen recently go on indefinitely,” said Macklem.

That being said, hopefully, in the months to come, prices will begin to cool in the interest of keeping the market stable.

With files from Erin Davis.