Both sales and prices increased in the Toronto real estate market in April. This is a sign that the market is recovering from last year's collapse.

The Toronto Regional Real Estate Board reported that the number of homes sold in Canada's largest city was up 27% in April compared to March when seasonally adjusted. This is the largest monthly gain in two decades, excluding the recovery from the Covid-19 quarantine in 2020.

On the price side, the underlying value of a Toronto home rose 2.4% to C$1.11 million ($815,000) in April on a seasonally adjusted basis. Toronto real estate broker Tom Story said this is the usual seasonal activity, but this time there is one difference—the number of available homes is not just low but extremely low.

Jason Mercer, chief market analyst for the Real Estate Board, said the increased demand for housing oversupply has resulted in renewed pressure on prices. He also noted that the persistent lack of supply is reducing housing affordability.

It's not just Toronto's real estate market that's seeing price increases and supply declines. Last month in Vancouver, which has long been one of the most expensive markets in the country, the base price also rose 2.4%.

Andrew Lees, director of economics and analytics for the Vancouver Real Estate Board, said the housing market continues to be plagued by a shortage of housing supply compared to the number of interested buyers. However, he noted that rising prices and increased sales in the spring are indicative of a strong return of buyers after a difficult year.