With January residential real estate sales posting more records for volume and prices, is London on the cusp of losing its market advantage?
THE TEMPS MAY say winter, but January was another hot and crazy month for the London-area real estate market, with the first month of the year breaking sales records and pushing the regional benchmark price over $500,000 for the first time ― and to an almost unbelievable $618,918 average resale price in London proper.
A total of 547 homes changed hands in the London reporting region (which includes Elgin and Middlesex counties) last month, according to data from the London and St. Thomas Association of Realtors (LSTAR) — the most of any January on record.
In addition, the region’s composite benchmark price ― which represents the value of a “typical home” in a given area ― rose nearly 6 per cent to $511,500 — the first time that number has passed the half-million mark.
“2021 came in like a lion for the LSTAR housing market,” says LSTAR president, Jack Lane. “We witnessed increases not only in average home prices — which can sometimes be skewed by a few outliers — but also in the benchmark prices for these regions, which paint a more accurate picture of local property values.”
In addition to the benchmark price, the average sale price also skyrocketed in the region, to $607,431 — an all-time high for the area and a 40.5 per cent jump over 2020 prices.
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In London proper, the numbers are even more startling: the average price of a home sold in London in January rang up at $618,918, representing a 40.8 per cent jump from a year prior.
Inventory remains near its lowest levels in the past decade, LSTAR says, with less than a month of sales’ worth of inventory available across the entire region. “At the end of January, there were 0.8 months of inventory across the entire LSTAR area, slightly higher than in December, but still at one of the lowest levels in the past 10 years,” Lane says. “Out of the five main areas, St. Thomas had the lowest housing supply, with only 0.5 months of inventory, while London’s and Strathroy’s values were at 0.7 months, on par with the whole region,” he added.
“The market is seriously imbalanced. There aren’t enough listings of new homes, resale homes or condos to satiate the market,” he says. “The pandemic shutdown is making things worse by slowing new permit activity, slowing construction pace and driving up new build costs.”
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Plowright points out that “the relative affordability of the regional real estate market is eroding, thus impacting our long-term ability to attract new residents.
“We will need a concerted effort on behalf of our municipal government to rapidly increase the pace of approvals for permits and development applications. We must, of course, have smart as well as aggressive growth. The region’s biggest employment sector is the construction industry. That industry can provide a leg up as we try to climb out of this pandemic slump over the next few years.” Kieran Delamont