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Home prices in Toronto surged by a third last month, highlighting the risks of the red-hot housing market in certain Canadian regions.

The average price of homes in the greater Toronto area jumped a record 33.2 per cent in March from the same month in 2016 to C$916,567 ($684,592), according to a Bloomberg compilation of Toronto Real Estate Board data.

Sales continued climbing at a brisk pace as well, up 17.7 per cent .

The sharp climb in Toronto home prices underscores concerns that the housing market may be expanding too rapidly, and setting itself up for a similarly rapidly fall down the line.

“Imbalances in some regional housing markets make it more likely that adverse economic shocks could cause large declines in prices, possibly creating financial stress for households as well as for lenders and mortgage insurers who may be relying on housing wealth as collateral for mortgage and consumer loans,” the Bank of Canada warned at the end of 2016.

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