Residential market analysis and a sampling of high- and low-priced listings in London
Photo: 484 Westmount Drive is listed for sale at $2,100,000
REAL ESTATE IN London: Everyone wins, everyone loses.
Meet Rachel and Jeff, hot in pursuit of their first home. They’ve been sacrificing for years, living in Jeff’s parent’s basement, suffering that indignity so they can save for a down payment on their first home.
They’ve patiently waited until they could put five per cent down and qualify for a starter home at $450,000. With unrelenting inflation, that starter home has morphed into a condominium townhouse. They’ve been working with a licenced realtor, getting pre-qualified for financing and actively offering on homes for over six months. After seven failed bids on multiple offer properties, they went all in on a less than ideal property, paid $25,000 more than they were comfortable doing and succeeded on buying a townhouse.
That property had been tenanted, as the seller, Karen, was an investor-owner. The tenants, Pam and Tom, who had been there six years, were living on a month-to-month lease, for an amount considerably under current market rates. The rapid rise in real estate values motivated Karen to sell, as the rental income was somewhat fixed due to rent controls.
Pam and Tom (the tenants) had enjoyed several years at below market rents, especially in the last two years, during which equivalent rents had almost doubled. That low rent they’d enjoyed may have come at a price, as their landlord Karen realized the rising property value offered a greater gain than holding the unit and collecting below market rent.
Now that Rachel and Jeff intend to occupy the unit, Pam and Tom have been served notice as per the Landlord and Tenants Act, to vacate the home in 60 days, and provided one month’s rent compensation as per the statute.
Pam and Tom knew this was coming, but it still hurt to say the least.
There are wins and losses across the board. The tenants, Pam and Tom, were winners over the last several years, with a rent-controlled townhouse at significant savings to market rates. They’re also losers, as their rent deal comes to an end and they’re back in the market looking for a new home to rent.
Rachel and Jeff won their townhome in a bidding war, having stretched their budget, and will be able to occupy their unit after a 60-day notice period. The compromise of a townhouse rather that a detached home means the market won more than Rachel and Jeff did. Jeff’s parents win as they get their basement back but lose having their daughter-in-law within the range of influence.
Karen wins as she realizes a significant gain, but suffers a sizable tax burden, and loses her retirement investment property. The province wins big in capital gains tax revenue and land transfer taxes, and the municipality eventually gains from the rise in property taxes. The city loses the attraction of affordability and risks future economic losses as a result.
Our market is complex. There are no villains, and as usual only the most vulnerable are the one’s making the greatest sacrifice. The lack of affordability hits hardest for those on the margins.
Address: 305-573 Mornington Avenue
MLS number: 40194009
List price: $209,900
Days on market: 4
Size: 1 bedroom, 1 bathroom, 640 square feet
Listing agent: Jarda Novotny, Sales Representative, Peak Professionals Realty Inc.
Address: 1129 The Parkway Street
MLS number: 40177298
List price: $1,780,000
Days on market: 53
Size: 7 bedrooms, 4 bathrooms, 3,000 square feet
Listing agent: Carmen McClemont, Sales Representative, Century 21 First Canadian Corp., Brokerage
Address: 104-1600 Adelaide Street North
MLS number: 40194627
List price: $209,900
Days on market: 1
Size: 1 bedroom, 1 bathroom, 700 square feet
Listing agent: Tiz Orlando, Salesperson, ReMax Centre City Realty Inc., Brokerage
Address: 1364 Corley Drive
MLS number: 40181989
List price: $1,995,000
Days on market: 46
Size: 5 bedrooms, 5 bathrooms, 4,019 square feet
Listing agent: Carlo Castellani, Sales Representative, Century 21 First Canadian Corp., Brokerage
London South & West
Address: 805-931 Wonderland Road
MLS number: 40192732
List price: $299,777
Days on market: 8
Size: 2 bedroom, 1 bathroom, 1,000 square feet
Listing agent: Neera Chopra, Sales Representative, Sutton Group Preferred Realty Inc., Brokerage
Address: 484 Westmount Drive
MLS number: 40188214
List price: $2,100,000
Days on market: 20
Size: 4 bedrooms, 3 bathrooms, 2,477 square feet
Listing agent: Jonathan David, PG Direct Realty Ltd. Brokerage
Disclaimer: London Inc. does not guarantee the accuracy of the statistical data on this page. The data does not represent the listings of any one agent or agency but represents the activity of the real estate community in the area. Any real estate agent’s ad appearing is separate from the statistical data provided, which is in no way a part of their advertisement.