There was no relief for homebuyers in the Greater Toronto Area last month as the average home price rose by nearly 28 percent compared to last year, as the supply shortage continued to hinder the market.

The Toronto Regional Real Estate Board revealed on Thursday that the average selling price of a home in the area exceeded $1.3 million last month, up from just over $1 million last February and more than $1.2 million in January of this year.

The average price of a detached home was more than $1.7 million last month, semi-detached properties $1.3 million, townhomes $1.1 million, and condominium apartments approaching $800,000.

The Ontario board put much of the blame for the high prices on demand that greatly exceeded supply, fueling a market where competition, bidding, few sellers, and a heated atmosphere were the norm.

However, the board said it detected signs in February that the area is taking a "modest step" towards a "slightly more balanced" market.

Those effects of the limited home supply came in the form of new listings, which are still below last year but at an annual rate slower than sales.

The total new listings for the month reached 14,147, nearly a 7 percent decrease from 15,146 last February.

Meanwhile, 9,097 homes were traded last month compared to 10,929 last February and 5,622 in January of this year.

This means home sales in February declined compared to record numbers registered in 2021, but still outpace the second highest sales rate for this month.

The Toronto Regional Real Estate Board (TRREB) expected sales to be lower this year because many people rushed to buy homes last year or in the early weeks of 2022 in an attempt to beat the looming interest rate hikes.

On Wednesday, the Bank of Canada raised the benchmark interest rate to 0.5 percent from 0.25, having remained steady over the past two years due to the COVID-19 pandemic and served as an incentive for financially strained buyers.

The increase will raise borrowing costs, including variable-rate mortgages.

According to TRREB, the interest rate hike will have a "moderate impact" on home sales but will be offset by high immigration levels and the ongoing lack of supply.

Housing prices are not expected to decline in the near term.

Jason Mercer, the board’s chief market analyst, said in a press release: "Since supply remains exceptionally low, it will take some time for the pace of price growth to slow."

He added, "Look for a more moderate pace of price growth in the second half of 2022 as higher borrowing costs cause some households to temporarily suspend their home purchases while they reposition themselves in the market."

Edited by: Dima Abu Khair