(Bloomberg) -- Canadian home buyers are facing the tightest market on record, with a purchasing frenzy driven by the Covid-19 pandemic showing no signs of slowing down.

Home sales and prices reached new highs in January, according to monthly data from the Canadian Real Estate Association released on Tuesday. Fueling prices was a sharp drop in new listings last month, down 13% from December.

As a result, Canada has only 1.9 months of housing inventory available -- the lowest reading for this measure of home supply on record.

Historically low mortgage rates have combined with increased demand for bigger living spaces to push Canada’s housing market to record heights over the last year. Aggravating matters is a lack of supply that is only getting worse amid a surge in Covid-19 cases and renewed lockdown measures over the past few months.

“The second wave probably had something to do with it, with sellers deciding this was a suboptimal time to list their properties for sale,” Robert Hogue, a senior economist with the Royal Bank of Canada, said in a telephone interview. “But that being said, demand has been tremendously strong and I just think it’s been absorbing inventory like there’s no tomorrow.”

The ratio of sales to new listings, a measure of a market’s tightness, rose to 91%, smashing records. Home sales rose 2% in January, pushing gains over the past year to 35%.

“The market is extremely tight with upward pressure on price becoming more intense,” Hogue said.

The gains have been across the board over the past year, in all segments of the market. But single-family homes in smaller towns and cities have recorded the biggest increases. Ottawa home buyers have seen prices rocket by 22% over the past year, double the appreciation in Toronto.

(Updates with analyst comment in sixth paragraph.)

©2021 Bloomberg L.P.