After a year of slumping sales and plummeting prices, the London area real estate market nudged up in March in what may be the first sign of a comeback.
After a year of slumping sales and plummeting prices, the London area real estate market nudged up in March in what may be the first sign of a comeback.
A total of 685 homes sold in the London region with an average selling price of $653,611, about a one per cent increase over the price in February and a 57 per cent increase over the 436 homes that sold in February, the London and St. Thomas Association of Realtors reported Wednesday.
It is welcome news for London area realtors, association president Adam Miller said.
“We have not seen a sales increase since January 2022. We have wanted to see this, (have been) waiting to see this,” he said.
“The crystal ball is definitely foggy. We have seen so many changes, but the signs are pointing to us coming out of this. We are moving in the right direction.”
The halt in interest rate hikes combined with lower inflation has helped consumer confidence as more people continue to move to the London region, increasing demand, Miller said.
“This does not surprise me. When rate hikes stopped, when we saw zero, I knew there would be people sitting on the fence who would get into the market.”
The Bank of Canada’s last interest rate increase was a quarter-point hike in January to 4.5 per cent. The bank held the line in March with no increase. The next possible one is in April, but speculation is there will not be an increase.
“I am anticipating another zero,” Miller said. “Interest rates went up faster than ever and that cooled the market. I think they want to see stability and an increase would sour a lot of first-time home buyers.”
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The London region market had 1,079 new listings in March compared to 761 the previous month. The inventory supply dropped two months from three and the average amount of time a home was on the market went from 21 days to 20.
In March 2022, home sales were 33 per cent lower, there were 30 per cent fewer new listings and the average home price was 20 per cent lower.
The trend in home sales and values increasing was seen across Ontario, the Toronto firm Canadian Home Realty said in a recent report. The company said a major factor driving the market was the creation of 22,000 jobs in Ontario, according to the most recent monthly employment report.
Canadian Home Realty also credited migration as more people move to Ontario and Southwestern Ontario.
“The inflow of immigrants is making the rental market super-hot as the growth compared to last year is in double digits. As the cost of rent is increasing rapidly, first-time homebuyers are switching to the option of owning a house rather than paying the mortgage of their owners’ through rent,” the company said in its report.
Across Ontario listings grew 35 per cent last month over February and home prices increased about 1.1 per cent while total home sales jumped 43 per cent, the report said.
“Data shows a steady increase in the coming months, and we are expecting consistent growth in average sale prices across Ontario,” Robin Cherian, chief executive at Canadian Home Realty, said in a statement.
Recent census data supports that claim as 20,490 recent immigrants to the London region that includes Strathroy, St. Thomas and parts of Middlesex and Elgin counties, became permanent residents of Canada between the last census in 2016 and 2021.
The number of immigrants without permanent status also is up, more than doubling from 8,170 in 2016 to 19,560 in 2021.
In London itselft, 468 homes were sold last month at an average price of $631,358 while 302 sold in February, at an average price of $614,216.
In the wider region that includes London, St. Thomas, Strathroy, and parts of Middlesex and Elgin counties, single-family home sales remain an indicator of the real estate market, with 497 sold last month compared to 325 in February.
The average price of a single-family home was $717,650 last month compared to $673,226 in February.
As for the condominium and townhouse market, 98 sold last month compared to 56 in February. The average price of $509,172 increased from the February average of $490,109.
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