The Toronto Real Estate Board says 2016 was a record year for the country’s largest real estate market, with sales climbing 11.8 per cent from the previous year.

That’s as sales last year in Vancouver, another one of the country’s most closely watched real estate markets, fell 5.6 per cent compared with 2015.

TREB reported the average home price in the Greater Toronto Area soared to $730,472 last month, up 20 per cent from December 2015.

The board said its members had 113,133 residential property sales through the MLS system last year, including 5,338 in December.

December sales were up 8.6 per cent compared with a year ago, 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 from a year earlier.

“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.

For the first time, the real estate board commissioned research firm Ipsos to conduct a survey on the activity by foreign buyers in the Toronto market.

The results of the online survey of 3,518 realtors, conducted between Oct. 6 and Oct. 21, suggested that 4.9 per cent of transactions in the Greater Toronto Area were with a foreign buyer.

In the City of Toronto, the rate of foreign buyers was 5 per cent.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

“With our low Canadian dollar we are a very good investment for foreign buyers,” said Caroline Baile, a Toronto-area broker with Royal LePage Your Community Realty.

However, Baile said perceptions among some that foreigners are the main factor driving home prices higher are mistaken.

“We’ve got low inventory,” Baile said. “We’ve got limited development land. Our interest rates are still really low. We've got low new home construction, a strong economy and steady immigration ... especially into the Toronto urban centre.”

The board said 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.

“Total new listings for 2016 were down by almost 4 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.”

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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 is 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.

On Wednesday, the Real Estate Board of Greater Vancouver reported that the composite benchmark price for all residential properties in Metro Vancouver, as measured by the Multiple Listing Service home price index, was $897,600 last month.

The result represented a 2.2-per-cent drop over the second half of 2016, but a 17.8-per-cent increase compared with December 2015.

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