Canadian home sales ended last year with a 22.7 per cent jump in December compared with a year ago as prices rose as part of a trend that should continue into this year, said the Canadian Real Estate Association.

Sales in the final month of 2019 were up across most of Canada compared with a year ago, when sales growth had slowed, the association said Wednesday.

On a month-over-month basis, home sales in December were down 0.9 per cent to end a streak of monthly gains that began last March.

Watch: 3 trends you can expect from Canada’s housing market in 2020. Story continues below.

Sales rose from a year ago as listings declined, putting upward pressure on prices. The national average price for a home sold in December 2019 was about $517,000, up 9.6 per cent compared with a year earlier.

Excluding the Greater Vancouver and Greater Toronto Area, two of the country’s most expensive and active housing markets, the average price of a home sold was about $400,000, up 6.7 per cent compared with December 2018.

The average price was up 11.3 per cent in Ontario, and 8.5 per cent in British Columbia, while it dipped 0.4 per cent in Alberta and 3.7 per cent in Saskatchewan.

“Home price growth is picking up in housing markets where listings are in short supply,” said Jason Stephen, president of CREA.

New home listings slid 1.8 per cent in December from a month earlier, leaving new supply close to its lowest level in a decade, said the association.

The trend pushed the national sales-to-new listings ratio to 66.9 per cent for the highest level since the spring of 2004, and well above the long-term average of 53.7 per cent.

The overall increase in activity from a year ago has been a boost to the economy, said BMO chief economist Douglas Porter.

“After a couple challenging years, the Canadian housing market has brushed itself off and gotten back on its feet ― transitioning from a drag on growth to a source of strength.”

He said the further price gains expected this year will also put further upward pressure on household debt and restrain action on Bank of Canada interest rates.

“The broad-based rebound in home sales, prices, and borrowing is a key reason the Bank of Canada has remained planted on the sidelines, and why we expect them to stay there in 2020.”

Not enough inventory

TD economist Rishi Sondhi noted that the weaker end to the year in activity, after month-over-month declines in December, was largely a result of the falling supply trend that should continue into this year.

“While the jobs market lost some steam, and interest rates are up from their September lows, a key contributor to the moderation in activity, in our view, is lacklustre growth in available inventories.”

He said sales should rise this year despite some constraints in supply.

“For 2020, we expect sales to rise, fuelled by a likely Bank of Canada rate cut, further job gains, robust population growth, and supportive federal policies. Prices should also record strong growth given tight conditions.”