(Bloomberg) -- Toronto’s housing market hummed back to life last month as the traditional spring selling season brought a surge in both sales and prices following last year’s record rout.

The number of homes trading hands in Canada’s largest city jumped 27% in April from March on seasonally adjusted basis, the Toronto Regional Real Estate Board said Wednesday. That’s the biggest monthly increase over the past two decades, other than during the rebound from the Covid lockdowns of 2020.

The benchmark price of a Toronto home rose 2.4% to C$1.11 million ($815,000) in April on a seasonally adjusted basis. The gain fully erased declines from earlier this year; prices are now up 0.5% year-to-date, the data show.

“This is seasonal activity in the way things typically happen, but the difference this time is that inventory is not just low but extremely low,” said Tom Storey, a real estate broker in Toronto. “Sellers didn’t want to put their property on the market in a market they were told wasn’t very good.”

The price increase comes after last year’s record price decline, which was driven by the Bank of Canada’s aggressive rake hikes. With the central bank now on pause, buyers have come out in force and refocused attention on the shortage of housing stock that had made Canada’s market one of the world’s hottest before last year. 

“As demand for ownership housing has picked up relative to supply, we are seeing renewed upward pressure on home prices,” Jason Mercer, the real estate board’s chief market analyst, said in a press release accompanying the report. A “persistent lack of listings” is hurting home affordability, he said. 

The number of new listings hitting the Toronto market trailed far behind the increase in sales at just 2.8%, according to a research note Wednesday from National Bank of Canada. That helped shrink the supply of houses on the market, which had built up over the past year, by 12.3%, and left the city’s active listings to sales ratio, a measure of how competitive the market is for buyers, tighter than the historical average, the note said.

And Toronto’s housing market isn’t the only one seeing tighter supply and rising prices. Vancouver, long one of the country’s most expensive markets, also saw its benchmark price rise 2.4% last month.

“The issue remains a matter of far too little resale supply available relative to the pool of active buyers in our market,” Andrew Lis, the Vancouver real estate board’s director of economics and analytics, said in a release Tuesday. “The fact we are seeing prices rising and sales rebounding this spring tells us home buyers are returning with confidence after a challenging year.”

(Updates with comment from real estate broker in fourth paragraph)

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