The real estate market is influenced by a variety of external factors ― and our local market is increasingly impacted by developments beyond our borders
THE WORLD IS getting smaller. We elected a new mayor and council in London on Monday, and although they have important work to undertake, we’re increasingly impacted by events beyond our region.
The pandemic virus obviously had no respect for borders, and international travel ensured a fast and efficient spread. Inflation is a worldwide problem, with Canada being one of the better managed, less effected among developed countries. Despite this, Canada will once again raise interest rates this morning targeting an intransigent inflation rate and moving mortgage rates up yet again.
Among the basket of goods used to assess inflationary effects on Canadians, housing has certainly played its part in reducing inflation in the last six months, dropping about 25 per cent from “inflated” levels. We now need the rest of the economy to calm and allow price increases to slow. Interest rates are but one affect on our housing market. Immigration plays a role, increasing demand while at the same time helping to alleviate a severe construction labour shortage.
Another impact is provincial legislation. Just yesterday, the Ontario government announced sweeping policy changes to speed up development approvals and increase density across the province. As has been the case in the GTA, they plan to allow three dwelling units on any lot without the need for permits ― this means basement suites, laneway units and apartments over garages in traditional single family home neighbourhoods.
The Ontario government also intend to increase the non-resident “speculation” tax from 20 to 25 per cent. This demand-side squeeze has become largely irrelevant as speculators have left the market this year, but it certainly may impact future investment from abroad. The province also wants to make it easier for housing to take over farmland and greenbelt areas; they may back increased density, but sprawl is likely the most significant affect we’ll see and feel outside of the dense urban area that is the GTA.
These national, international and provincial issues are all impacting our local real estate market. Housing demand continues to be low, with the number of houses listed growing, and days on market extending even further. Prices have stabilized at levels achieved one year ago. London is once again an “affordable” market, but that affordability is being severely impacted by climbing interest rates.
Buying and selling real estate is increasingly complex in this interconnected world. Determining a property’s value can be challenging, and predicting future values is fraught with risk.
Experienced real estate professionals have the tools to help guide you in these difficult times. If you’re challenged to make ends meet due to rising interest rates or inflationary pressures, seek guidance. There are many options available to a homeowner as they navigate household finance stress. It’s always best when you decide how to proceed, rather than your mortgage company doing it for you. You are our client when you’re buying, selling or making plans to manage a lack of affordability. We’re here to help.
High- and low-priced real estate listings around town this week
Address: 207-1170 Hamilton Road
MLS number: 40319654
List price: $159,900
Days on market: 47
Size: 1 bedroom, 1 bathroom, 500 square feet
Listing agent: Tingting Hu, Sales Representative, 21 Century Realty Corp.
Address: 1745 Kilally Road
MLS number: 40327717
List price: $3,325,000
Days on market: 32
Size: 3 bedrooms, 4 bathrooms, 4,700 square feet
Listing agent: James Hudson Smith, Sales Representative, Sutton Group-Select Realty Inc. Brokerage
Address: 54-1220 Royal York Road
MLS number: 40326441
List price: $374,900
Days on market: 39
Size: 2 bedroom, 1 bathroom, 1,150 square feet
Listing agent: Jordan Smeltzer, Sales Representative, Davenport Realty
Address: 40 Sir Robert Place
MLS number: 40266200
List price: $4,580,000
Days on market: 106
Size: 5 bedrooms, 4 bathrooms, 7,650 square feet
Listing agent: Kim Mullan, Broker, Sutton Group – Select Realty Inc.
London South & West
Address: 32-198 Springbank Drive
MLS number: 40325975
List price: $135,900
Days on market: 33
Size: 2 bedroom, 1 bathroom, 640 square feet
Listing agent: Zahra Khawari, Sales Representative, PC275 Realty Inc.
Address: 1938 Kilgorman Way
MLS number: 40331360
List price: $3,495,000
Days on market: 21
Size: 5 bedrooms, 6 bathrooms, 5,753 square feet
Listing agent: Linda Joan Rice, Sales Representative, Royal LePage Triland Realty
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.