Nevertheless, the market is showing signs of finding an equilibrium, according to CREA.

Canada’s housing market continues to defy expectations, with sales in March up 70% compared to a year ago and average prices up by more than 30%.

The Canadian Real Estate Association (CREA) said Thursday that more than 70,000 homes were sold last month, surpassing the previous record for March by 22,000 transactions. The figure was 76% higher than the same month a year ago, which saw sales slow amid the beginning of the Covid-19 pandemic.

Things began to turn around in May 2020 and have continued on an upward trend.

On the price side, the average selling price for a home sold on CREA’s MLS system in March was $716,828—up by 31.6% in a year, and the biggest annual pace of gain on record.

The red-hot pace is causing concern among economists and policy-makers who worry that first-time buyers may take on massive mortgages they may not be able to afford if interest rates rise.

Last week, Canada’s top banking regulator proposed to raise the stress test level on mortgages to make sure that borrowers can afford higher rates.