Toronto home sales caught fire in the first half of May, but at this frenzied pace, homeowners better hope that fire doesn’t burn everything down.

The latest numbers from the Toronto Real Estate Board suggest a market so strong that it might just be overheating: Sales volumes jumped 19.6 per cent compared to the first half of May in 2013, and prices followed.

The average cost to buy a house in Toronto, including condos, soared to $663,787, up 11.5 per cent in the space of a year. In the Greater Toronto Area, prices were up 8.9 per cent, to $542,047 on average.

Condo prices in Toronto were up 12.2 per cent, to just under $400,000 on average, while single-family homes jumped 13 per cent to $966,867. (By Teranet’s measure, single-family houses have already surpassed the $1 million mark.)

So is this a sign of a strong, healthy market or a sign of extreme overheating?

Compare those house prices to inflation, which was running at a 1.5-per-cent clip last time StatsCan checked, and to wage growth, which is clocking in at about 2.3 per cent per year. Toronto’s house prices are far out of proportion, and affordability is inevitably deteriorating.

Toronto’s real estate board isn’t sounding the alarm just yet.

“While tight market conditions continue to prompt strong year-over-year increases in the average selling price, it is important to point out that the monthly cost of home ownership – mortgage principal and interest, property taxes and utilities – has not trended upward as strongly. Strong price growth has been mitigated to a large degree by low borrowing costs,” the board’s senior market analyst, Jason Mercer, said in a statement.

Incredibly, those low borrowing costs may yet sink lower, if other lenders follows the example of Investors Group, which recently introduced a variable-rate mortgage starting at just two per cent.

All the same, the sudden acceleration in house price growth should concern housing bubble-watchers. As BMO economist recently showed in a chart, bubbles tend to be preceded by a sharp increase in prices. Here, we see sharp price growth before the housing bubble burst in Toronto in the early 1990s. The more recent run-up in prices has not been as steep — until now.

Despite the strong numbers coming out of Toronto and some other markets like Calgary and Vancouver, some economists have already declared an end to Canada’s long-running housing boom. A recent report from Scotiabank predicts the housing market is about to shift from being a major driver of economic growth to being a drag on GDP.

What do you think? Are these huge house price spikes the start of a housing bubble, or just a sign of a strong housing market? Let us know in the comments below.

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• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• New Westminster, B.C.: $579,000

  The house may only have 726 square feet, but the spacious 60-foot-by-140-foot lot means you can potentially build two new homes on the spot, and that’s pretty much this property’s main selling point.

• Surrey, B.C.: $539,000

  The realtor selling this one doesn’t even pretend the house is good value for money — this house is “lot value only,” is an opportunity for developers or investors to build something new on the land.

• Surrey, B.C.: $539,000

  The realtor selling this one doesn’t even pretend the house is good value for money — this house is “lot value only,” is an opportunity for developers or investors to build something new on the land.

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Surrey, B.C.: $539,000

  The realtor on this property doesn’t even pretend the house is godo value for money. This is “lot value only,” and presents an opportunity for investors and developers. Two bedrooms and two baths in the current house on the site.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• NEXT:

  MOST EXPENSIVE HOUSES FOR SALE IN CANADA, FEB. 2014 EDITION

• Newfoundland and Labrador: $1.85 million

  This a href=”http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14085863″ target=”_blank”six-bedroom home in St. John’s/a, constructed over 100 years ago, boasts beautiful original features like beveled glass and “intricate” plaster work, as well as modern additions, such as “spa inspired ensuites with in-floor heated marble,” according to the listing.

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• New Brunswick: $2.9 million

  This is actually two finished houses on 235 acres of land near St-Francois, N.B., and it’s definitely one of those properties that look better on the inside than the outside. a href=”http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13978788″ target=”_blank”Vaulted ceilings and fireplaces adorn this building/a, which also boasts long walks in the woods — on the property.

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• Saskatchewan: $3.8 million

  A place like this in Vancouver or Toronto could easily run you a cool $10 million, but a href=”http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13574167″ target=”_blank”in Regina all it takes is $3.8 million/a (pocket money, right?). This six-bedroom, four-bath property has parking space for no fewer than six cars and has more than 6,000 square feet of living space, including some pretty breathtaking staircases and foyers, and one heck of a billiard room.

• Saskatchewan: $3.8 million

• Saskatchewan: $3.8 million

• Saskatchewan: $3.8 million

• Saskatchewan: $3.8 million

• Saskatchewan: $3.8 million

• Saskatchewan: $3.8 million