The average sale price of a Toronto home climbed to $526,528 in January, a 9% increase from a year ago.

It became difficult to find a home last month in the city as the number of houses listed for sale dipped sharply, said the Toronto Real Estate Board.

“Looking forward, it is possible that strong price growth, and therefore an increase in home equity, will act as a trigger for more households to list their homes for sale,’said Dianne Usher, president of the board, in a release.

Sales in the city dropped to 2.2% in January from a year ago as new listings for the month were only 8,822, a 16.6% decline from a year earlier.

Jason Mercer, TREB’s senior manager of market analysis, expects strong price growth for 2014. “Similar to last year, competition between buyers for singles, semis and town homes in the City of Toronto and surrounding regions will continue to exert upward pressure on selling prices,” he said.

Mr. Mercer said mortgage rates near all-time lows is helping affordability.

The Financial Post reported this week that some mortgage brokers are now offering five-year fixed rate mortgages below 3% — a level that set off rate war battles between financial institutions in previous spring markets.
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