London real estate has been a seller’s market for three years and will remain one in 2020, according to Re/Max’s annual outlook.
After a 2019 in which prices rose by about 10.6 per cent from 2018 – one of the highest jumps in Ontario, according to Re/Max – the real estate firm forecasts a five per cent hike in 2020.
The average sale price of a home in the London region is now $416,000, making it the ninth most affordable of 12 major Canadian markets – up one place in the Canadian Real Estate Association ranking.
Low inventory, growing population and deep-pocketed buyers from the Greater Toronto Area continue to drive London’s rising home prices, said Carl Vandergoot, owner of Re/Max Centre City Realty Inc.
“We are definitely in a seller’s market,” he said. “There’s just more competition in purchasing a home.”
But sales have not slowed in the region, which takes in St. Thomas, Strathroy and parts of Elgin and Middlesex counties.
According to the latest London St. Thomas Association of Realtors (LSTAR) figures, 752 homes changed hands last month, the best November since the organization began tracking data in 1978. It follows the best October on association records, with 928 sales.
“We had another solid month, demonstrating the robust marketplace all across the region,” LSTAR president Earl Taylor said in a statement.
“There have been 9,658 home resales year to date, which is up 3.2 per cent compared to the same period in 2018, and we’re on course to surpass last year’s total sales.”
Though multiple offers and sales above asking price are still common, things have levelled off somewhat in the last year or so, Vandergoot added.
Where some homes were selling $100,000 above asking price two years, that premium was closer to $25,000 or $30,000 in 2019.
Houses prived at more than $500,000 are not selling at the same pace as past years, Vandergoot said, and competition is fiercer the more affordable a property is.
“We are finding that the first-time buyer market, or the under $400,000 homes are definitely more challenging,” he said.
“A shortage of more affordable homes is causing that seller’s market.”
Locally, Re/Max says the largest price hikes will be seen in north and southwest London due to their proximity to amenities like hospitals, restaurants and the 401, while the east end will likely attract a lot of attention for its affordability.
London, however, remains a very attractive market compared to other cities in the province, Vandergoot said.
“London’s prices are still not too high for what you are paying in other parts of the country and Ontario,” he said.
“So that’s why it’s still kind of the perfect storm; even though prices have gone up a lot, it’s still very attractive for people to buy a home in the London area.”
Across Ontario, Re/Max forecasts Windsor will see the highest price jump, nine per cent, in 2020, followed by Kitchener-Waterloo and Niagara at seven per cent, and Ottawa, Kingston and Toronto at six per cent.
NOVEMBER AVERAGE SALE PRICE
Elgin County: $417,206
Middlesex County: $515,016
St. Thomas: $327,731
LSTAR region: $416,116
Source: London St. Thomas Association of Realtors