The report by Christie's International Real Estate says Toronto was the only location among the world's top 10 markets to see a faster pace of luxury home sales last year over 2013 — 37 per cent in 2014, compared with only four per cent the previous year.
The study says the extremely low supply of homes in Toronto has pushed prices for relatively average homes to over $1.2 million, and up to $4.8 million for larger homes or those in more desirable neighbourhoods.
Homes worth $1.2 million or more spent less time on the market in Toronto than in any other top locations — an average of 31 days, eight days less than the previous year.
By comparison, the second-fastest market was San Francisco, where homes in that price range took an average of 71 days to sell. The report says the global average in 254 days.
However, Toronto ranked only 10th on the general luxury index, which measures overall prices as opposed to growth and demand. London was ranked first.
"2014 was the Toronto market’s second-best year on record," Justine Deluce, a broker at Chestnut Park Real Estate, said in the report.
"If there had been more inventory, the record would easily have been shattered."
On average, luxury resort markets saw a stronger boost in sales than urban areas last year, the report shows.
The Muskoka region north of Toronto saw a "marked increase" in luxury home sales, especially in the $2.4 million or more range, which went up 66 per cent from 2013.
"The jump in luxury sales volumes does not necessarily show that average sale prices increased, but does indicate that buyers had an appetite for more expensive recreational properties—something that has not occurred since before the recession of 2008," Deluce said.
Last year also saw more properties than ever being sold for more than US$100 million across all markets.
-Follow @ploriggio on Twitter
Also on HuffPost