The housing sector ― a persistent area of financial pressure ― is also showing signs of decline. Unit sales continue to be very slow compared to historic norms, and prices are easing.
Before the inflation data release, the consensus view among economists was that the Bank of Canada would cut interest rates by a quarter of a percentage point at each of its three remaining announcements this year, starting with the September 4 decision. The CPI report reinforces that likelihood.
The U.S. Federal Reserve is expected to cut interest rates for the first time this cycle. Such a move would provide additional cover for the Canadian central bank to continue to drop rates to stave off recession.
As we approach September, we may see some renewed interest from buyers who have taken a “vacation” from their searches
In July, the Bank of Canada increased their emphasis on downside risks to the economy and the possibility that inflation could undershoot the two per cent target. This suggests the bank’s concern over recession is beginning to outweigh their concern over fighting inflation.
Higher interest rates have been costly for the economy, particularly in the labour market, where the unemployment rate has risen to 6.4 per cent. That’s nearly two percentage points higher than a historic low two summers ago.
A large portion of homeowners will be renewing their mortgages at higher interest rates over the next two years ― something that is having to be considered by Canada’s central bankers. As interest rates fall, that renewal cliff gets less risky for Canada’s homeowners facing refinancing.
Locally, the real estate market is still in the seasonal summer slowdown, with new listings outpacing tepid demand. As we approach September, we may see some renewed interest from buyers who have taken a “vacation” from their searches. New construction demand and investor activity remains on the sidelines for now, so any uptake in activity will be slow and steady. There is no urgency in the real estate market ― if someone tells you otherwise, you may want to question their motivation, and ask for the data.
Market analysis provided by Marcus Plowright, Sales Representative, A Team London. Marcus can be reached at 519-872-8326 or marcus@ateamlondon.ca.
High- and low-priced real estate listings around town this week
London East
Low
Address: 506 Elizabeth Street
MLS number: X9248038
List price: $299,000
Days on market: 11
Size: 3 bedroom, 1 bathroom, 1,100-1,500 square feet
Listing agent: Agnieska Sapala, Sales Representative, Century 21 First Canadian Corp.
High
Address: 129 John Street
MLS number: X9234740
List price: $5,595,000
Days on market: 19
Size: 9 bedrooms, 19 bathrooms, 5,000+ square feet
Listing agent: Trent Forristal, Salesperson, Sutton Group – Select Realty, Brokerage
London North
Low
Address: 147 Wilson Avenue
MLS number: X8380834
List price: $439,900
Days on market: 111
Size: 3 bedroom, 2 bathroom, 1,410 square feet
Listing agent: Sally Jia, Salesperson, Initia Real estate (Ontario) Ltd.
High
Address: 20735 Denfield Road
MLS number: X8375688
List price: $3,799,999
Days on market: 85
Size: 5 bedrooms, 6 bathrooms, 3,500-5,000 square feet
Listing agent: Shawn Nagy, Sales Representative, Sutton Group – Select Realty, Brokerage
London South & West
Low
Address: 1117 Byron Baseline Road
MLS number: X9009620
List price: $434,900
Days on market: 48
Size: 3 bedroom, 1 bathroom, 700-1,00 square feet
Listing agent: Kathy Amess, Broker of Record, Blue Forest Realty Inc.
High
Address: 9385 Elviage Drive
MLS number: X9231344
List price: $3,899,000
Days on market: 21
Size: 5 bedrooms, 6 bathrooms, 3,500-5,000 square feet
Listing agent: Ashley Winder, Sales Representative, Sutton Group – Select Realty 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.
Price check: A sampling of high- and low-priced real estate listings around town this week
A summary of recent commercial real estate activity in London
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