Canadian existing home sales reached the second-highest in almost six years in October on gains in Toronto and Vancouver.

The number of transactions rose by 1.8%, the fastest since May, to 42,964, the Canadian Real Estate Association said from Ottawa Monday. The average price rose 2.9% to $452,552 on the month for a 12-month gain of 8.3%.

Vancouver sales rose by 7.7% in October to 3,785, for a gain of 19.3% from a year earlier. In Toronto, sales gained 3% to 8,588. Prices in those two cities averaged $940,745 and $625,010, respectively.

Rapid gains in two of Canada’s biggest cities fuelled by record consumer debts brought a call last week for regulations to curb the risk of a slump from the Organization for Economic Cooperation and Development. The Bank of Canada has cut interest rates twice this year saying the housing market isn’t likely to crash and stimulus is needed to carry the country out of a shock from low oil prices.

“Frothy price gains in Vancouver and Toronto mean both regions, which account for about a quarter of the national population, are increasingly vulnerable to a correction,” Doug Porter, chief economist at BMO Capital Markets in Toronto, wrote in a research note.

Part of the problem for policy makers is that few other housing markets are under strain, Porter said. Monday’s CREA report showed sales fell in about half of the markets it tracks across the country, and there is also a divide between a relative scarcity of single-family homes and an ample supply of condominiums.

Canadian Home Sales Climb to 2nd-Highest Level in Almost 6 Years by Theophilos Argitis & Greg Quinn | Financial Post