Yonge St at Gerard by Mary Crandall

The TorontoMLS System reported 6,519 sales in November 2014 which is a 2.6 per cent increase compared to 6,354 November 2013. The trend of year-over-year sales growth continued, but there was a significant lack of inventory, with active listings down in comparison to last year. 

Even though there was a constrained supply of homes for sale, homeownership remains popular due to affordable monthly payments.

"This is coupled with the fact that housing has proven to be a quality long-term investment,"

stated Toronto Real Estate Board President Paul Etherington.

The higher prices are mainly due to the strong competition between buyers. If the inventory doesn't improve, this trend is likely to continue in 2015.