The lack of housing supply is expected to remain a pressing concern this year as Canada moves further to a seller's market, market watchers say.
The sales-to-new-listings ratio in November was at 66.3%, representing a 2.7% annual decline in the new housing stock. This came while prices have rebounded steadily over the past year.
At the same time, the total months of inventory, which refers to how long it would take to sell off all available homes, hit its lowest level since 2007 at 4.7 months.
Zoocasa market watcher Penelope Graham said the lack of supply is a "far more acute issue”, particularly in the Greater Toronto Area.
Citing figures from the Toronto Real Estate Board (TREB), Graham said the sales-to-new-listings ratio in the region was 81%, indicating that only around one in five newly-listed homes were sold in November.
"Analysts are raising concerns that should undersupply persist, it could set the stage for the type of unsustainable price growth seen in the 2016 market, which was what prompted new regulatory change in the first place," she said.
TREB chief market analyst Jason Mercer said the influx of people in GTA and the declining negotiated mortgage rates resulted in sales accounting for a greater share of listings during the second half of 2019.
"Increased competition between buyers has resulted in an acceleration in price growth. Expect the rate of price growth to increase further if we see no relief on the listings supply front," he said.