After six consecutive months of record-breaking sales, the London area market levelled off, just a bit, in July.
The London and St. Thomas Association of Realtors (LSTAR) said a total of 1,002 homes sold in July, 1.2 per cent more than the same month last year, but just shy of the record of 1,009 sales set in July 2007.
LSTAR president Jim Smith said the sudden cooling of the Toronto real estate market is a factor.
“The Toronto buyers are still coming, but the not steady stream we saw in the spring,” said Smith.
The Greater Toronto Area (GTA) has seen sales and prices drop since April after the provincial government imposed new rules to curb speculators and foreign buyers.
July figures from the Toronto Real Estate Board are not yet available, but June sales were down 37 per cent compared to the same month last year and the average price of homes was down 8.1 per cent compared to May, but still up 6.3 per cent compared to one year ago.
The hot real estate market in the London area has been largely credited to a spillover from the GTA.
With single-family homes selling for more than $1 million in Toronto, London-St. Thomas realtors say buyers from that area were snapping up homes and driving up prices.
Overall, home sales in London-St. Thomas are up 20 per cent for the year. Smith said the number of new listings also is up 15 per cent compared to last July, providing a better selection for buyers and more stability.
“There are signs we are moving toward a balanced market. A lot of pressure has been eased.”
Dianne Gordon of London Living Realty said the London market is “volatile” with some homes selling quickly and others taking four to six weeks.
“The frenzy is not there, it’s left the market,” she said.
Dustin Pritchard, co-founder of PC275, a London-based brokerage, said the provincial efforts to cool the Toronto market are likely short-lived.
“This usually deflates things for a few months and then it bounces back with some vigour and we’ll see a rebound in London,” he said.
Pritchard said the Toronto buyers tend to be retirees and investors.
“They are retiring early because they can. They’ve added another $300,000 to $400,000 to their portfolio that they didn’t think they would have.”
The July sales in London-St. Thomas include 793 detached homes, and 209 condominium sales
The average year-to-date sales price for all homes was $330,718, up 18.5 since December,
Smith said higher mortgage rates as the Bank of Canada moves to raise the prime interest rate, should have little impact on home sales because the increases will be small and gradual.