TORONTO -- The average price of a detached home in Toronto shattered the $1.5 million mark for the first time last month, the city's real estate board said Friday, adding fuel to worries about a housing bubble.

The average price of homes sold in the Greater Toronto Area in February soared 27.7 per cent compared with a year ago, while the number of properties sold rose 5.7 per cent, the Toronto Real Estate Board said.

The increase in sales came in spite of the fact that last year was a leap year and benefited from an extra day of activity.

"I think the best thing that we can do is to keep a very careful eye on this," Mayor John Tory said. "I'm very concerned about it."

Tory said he is part of a federal-provincial working group that is trying to determine what factors are driving real estate prices that have skyrocketed in recent months, putting the dream of home ownership further out of reach for some.

"It's been crazy out there," said Shawn Zigelstein, a sales representative with Royal LePage Your Community Realty. "There doesn't seem to be a slowdown."

Zigelstein said he expects real estate prices will continue rising at a rapid rate in the months ahead, attributing that to a combination of limited inventory, strong immigration to the city and low interest rates.

"If we get an influx of inventory, I think we'll start to see a little bit of a slowdown in pricing, potentially," he said.

The average selling price in the GTA hit $875,983 in February, while in the City of Toronto it was $859,186, an increase of 19.2 per cent. The average price of a detached home in the City of Toronto hit $1,573,622, 29.8 per cent higher than a year ago.

The MLS home price composite benchmark price for all communities measured by TREB was $727,300, up 23.8 per cent.

Concerns have mounted that home prices in Canada's largest city have spiralled to the point where policy-makers need to intervene, as they have in Vancouver, where a number of measures have been implemented including a tax on foreign buyers. The Ontario government has resisted such a move.

TREB president Larry Cerqua said governments at all three levels need to address the lack of homes available, not foreigners buying properties as investments.

"They should consider revisiting land-use designations in built-up areas to allow for a greater diversity of home types, streamlining development approvals and permitting processes, and looking at ways to incentivize landowners to develop their land," Cerqua said in a statement.

On Thursday, the Real Estate Board of Greater Vancouver released figures showing a 41.9 per cent plunge in homes sold last month year-over-year.

The MLS home price composite benchmark price for Metro Vancouver was $906,700, 14 per cent higher than what it was a year ago, but down 2.8 per cent from six months ago, after the tax on foreign buyers took effect.