The Toronto Real Estate Board says the GTA's average home price soared to $730,472 last month, up 20 per cent from December 2015.

The board says strong December sales volume helped make 2016 a record year for realtors in the Greater Toronto Area.

There were 5,338 sales transactions for all types of residential property last month — including condo units and fully detached houses.

That was up 8.6 per cent compared with December 2015 — despite a tight supply of properties for sale.

The board's MLS house price index — which adjusts for the different types of properties — was up 21 per cent in December.

For the full year, TREB members had 113,133 sales through the MLS system — up 11.8 per cent compared with 2015, which had the previous record high.

Various factors boosted home prices

"A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region's population continued to grow in 2016," TREB president Larry Cerqua said in a statement Thursday.

The board says upward momentum on pricing accelerated as the year progressed and the overall average selling price for the calendar year was $729,922 — up 17.3 per cent compared with 2015.

Another factor affecting prices was a constrained supply of active listings, which hit a 15-year low in December.

Jessica Braun is looking to buy a home in Toronto, but high prices and a lack of listings is making the process "frustrating."

New listings down by almost 4 per cent

"Total new listings for 2016 were down by almost four per cent," said TREB's director of market analysis, Jason Mercer.

Mercer added that government rule changes and policy debates have focused on high demand but "what we really need is more policy focus on issues impacting the lack of homes available for sale."

Jessica Braun is struggling to navigate through a market of scarce supply. She's been on the hunt for a three-bedroom house since September — with a budget of less than $1 million.

"It's harder than I expected," she said. "There aren't a lot of listings out there, and everything out there is really expensive."

She's only put in an offer on one house and calls the buying process "discouraging."

"I can't quite get my head around the idea that my partner and I, who are both very well-employed and should be able to afford a house, might not be able to make it happen."

Toronto real estate Jean Pearson said it's getting hard to find homes to list since demand is high and supply is low.

More people staying put

Toronto real estate agent Jean Pearson told CBC Toronto that it's getting ever more difficult to find homes to list.

He sees many clients choosing to renovate instead of move.

"They say, 'Well, where are we going to go?' It becomes a difficult undertaking just to find them a new home that's bigger, larger, where they're going to have to do renovations anyway," he said.

Pearson also said buyers involved in bidding wars are forgoing things like home inspections because they need to act so quickly.

"They can't do their due diligence."

Mortgage changes

In October, the federal government made a number of changes aimed at stabilizing the country's real estate markets, including requiring stress tests for all insured mortgages.

The stress test change was intended to ensure that Canadians don't take on larger mortgages than they can handle, particularly in markets such as Toronto and Vancouver where affordability is stretched.

Mercer said it will take time for the market to balance out. "It's a problem that's continued to compound since the recession and it's not going away."

Based on supply trends, Toronto won't see see a massive turnaround in homes available in 2017, he said.

The B.C. Real Estate Association says Ottawa's new stress-test for insured mortgages will reduce affordability for first-time home buyers. (David Horemans/CBC)

Home sales in Metro Vancouver fell

On Wednesday, the Real Estate Board of Greater Vancouver reported that home sales in Metro Vancouver, one of the country's most watched housing markets, fell 5.6 per cent last year.

Meanwhile, the composite benchmark price for all residential properties in Metro Vancouver, as measured by the Multiple Listing Service home price index, tumbled to $897,600 last month. That's still up 17.8 per cent compared to December 2015. ​