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Toronto’s home prices capped a record quarter of gains in March amid concern the market is in a bubble.

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It’s a mystery that is stumping politicians and policy makers alike, but here are five factors that could be causing the housing market to defy gravity.





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Prices in the nation’s biggest city increased 6.2 per cent last month from February, according to a benchmark price index released Tuesday by the Canadian Real Estate Association. The gain is the biggest in records dating from 2000. Actual price gains averaged almost five per cent in the quarter, the largest three-month increase in records dating from 1988.

“The drum-tight housing market balance in Toronto and nearby cities stands in contrast to housing market trends elsewhere in Ontario and other provinces,” CREA chief economist Gregory Klump said in the report.

The figures come hours before officials including Canadian Finance Minister Bill Morneau, Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory meet to discuss surging sales and prices that some economists describe as a bubble.