Confused about the London real estate market? Here’s what’s happening now ― and what could happen next
THE LOCAL REAL estate market has been steady since July, and October continued the trend. Prices have stayed relatively stable with very little change overall, with the median price (half the homes sold above this price and half below this price) at $579,500 in July and $575,000 in October.
The average price has fallen a bit more than that ― by about 5 per cent ― reflecting a shift to more affordable house sales outpacing the more expensive properties.
Listings have continued to outpace sales by about a two to one margin over this period. A significant number of listings aren’t selling and are being relisted at lower prices or taken off the market. This tells us that sellers aren’t prepared to lower their asking prices to get a deal done but would rather wait the market out ― they expect higher prices in the future.
Regarding price expectations for the future, let us look at one microcosm of the local real estate situation. In the affordable townhouse market, the number of listings between $380,000 and $450,000 was 35 as of November 10. That is a considerable amount of choice for a first-time buyer or investor, and there are a large number of these properties not being listed as sellers wait for price improvements.
With transaction volume down about 40 per cent from normal, and continued pressure to push mortgage rates higher, it’s unlikely this inventory of affordable listings will decline through the winter months. Many of these buyers have school-aged children and are less inclined to move during the school year. Thus, we could assume the number of townhomes available for sale in the spring may even exceed the current number. More choice means downward price pressure.
There may be continued moderate downward real estate pricing pressure over the next six months as we continue to fight inflation with rising interest rates. We don’t expect significant pricing declines, but the takeaway should be that there are few reasons why the prices would climb. The only stimulus is immigration. The feds have announced a big push to increase immigration, which will have a limited affect on our local market, and perhaps a greater impact on the rental market.
New construction will take years to affect supply, and the looming recession we’re being driven into means in the short-term builders will be hesitant to build when supplies, subcontractors and labour continue to be difficult to source. The main reason builders will hold back is weakened demand. Costs haven’t fallen, but the appetite of the consumer for recent new house pricing has evaporated. Along with that, many new builds of the last 24 months were purchased by investors and speculators ― they will be marketing those houses and competing with the builders, creating downward pricing pressure.
Our recommendations remain unchanged. With the cost of borrowing continuing to go up, and prices relatively stable, now is a good time to make a move. Prices should remain relatively stable over the winter months and the supply of listings will remain robust. We shouldn’t expect any significant change for 2023. After the roller coaster of the last year, perhaps we should revel in the blessing of a more stable market.
High- and low-priced real estate listings around town this week
Address: 1101-583 Mornington Avenue
MLS number: 40271297
List price: $199,900
Days on market: 159
Size: 1 bedroom, 1 bathroom, 580 square feet
Listing agent: Justin Van Eck, Sales Representative, Blue Forest Realty Inc.
Address: 1745 Kilally Road
MLS number: 40327717
List price: $3,325,000
Days on market: 46
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: 53
Size: 2 bedroom, 1 bathroom, 1,150 square feet
Listing agent: Jordan Smeltzer, Sales Representative, Davenport Realty Brokerage
Address: 565 Leyton Crescent
MLS number: 40328768
List price: $3,280,000
Days on market: 39
Size: 6 bedrooms, 5 bathrooms, 5,966 square feet
Listing agent: John H. Crosby, Sales Representative, Royal Lepage Triland Realty
London South & West
Address: 32-198 Springbank Drive
MLS number: 40325975
List price: $135,900
Days on market: 47
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: 35
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.