“It’s a stunning development though not entirely surprising considering how hot the Toronto-area market has become, especially since the fall,” RBC senior economist Robert Hogue said in a report published Friday.

“Vancouver prices have accelerated as well, just not to the same extent.”

Vancouver's HPI increased 18.5% on an annual basis last month, while Toronto saw a 33.3% increase. The Fraser Valley saw a 37.4% increase.

“Solid demand and a dearth of supply kept conditions steamy in Canada’s major markets,” Hogue said, adding this is the first time in decades Toronto’s benchmark price has surpassed Vancouver’s.

“Rock-bottom inventories continue to be a major irritant for [Vancouver] buyers as we enter 2022.”

The Bank of Canada is widely expected to hike its overnight rate next month, which could temper the real estate market somewhat. But buyers will still have to contend with low inventory. 

“Our view is that activity will stay exceptionally strong in the near term nationwide though we expect the Bank of Canada’s rate liftoff will start cooling things down later this year,” Hogue said, referring to national trends.

“Accompanied by an expected material increase in housing completions, we believe this will gradually ease the extreme imbalance in the market and in time moderate the pace of price appreciation.”