London-St. Thomas housing market hot

Another homes sales record set in June; realtors cite Toronto spillover effect

Like Windsor and Essex County, there’s no sign of a slowdown in the real estate market in the London area, which chalked up yet another record month for sales in June.

The London and St. Thomas Association of Realtors said a total of 1,245 homes sold in June, a record for the month and a 9.9 per cent increase from last year.

“We’re halfway through the year, and we had the sixth consecutive month of record sales,” said association president Jim Smith.

Sales so far this year are up 23 per cent compared to the first half of 2016.

“Other regions have started to see a drop in sales, according to the latest figures, but realtors across London and St. Thomas continue to receive interest from outside the region,” he said.

The hot real estate market in the London area this year has been largely credited to a spillover from the Greater Toronto Area.

With single-family homes selling for over a million dollars in Toronto, London-St. Thomas, realtors say buyers from that area are snapping up homes and driving up prices.

But there are signs the Toronto area market is cooling after some measures taken by the provincial government this spring to discourage foreign speculators.

Toronto area sales were down 20.3 per cent in May compared to the same month in 2016 and there was a smaller drop in April.

Smith said the wave of Toronto buyers seems to be subsiding a little.

“It’s not as rampant as it was in March and April, but we are still running into multiple offers so if there is a trickle-down effect from Toronto slowdown it hasn’t trickled down yet,” said Smith.

The June sales in London-St. Thomas include 998 detached homes, an increase of 8.6 per cent

from the previous year, while there were 247 condominium sales, up 15.4 per cent from 2016.

The average sales price across London and St. Thomas was $335,233 down 2.8 per from May.

But the average year-to-date sales price was $331,524 up 18.8 per cent from the 2016 average home price of $279,057.

Smith said the boom in resale homes is spilling over to other parts of the housing market including new homes and renovations.

“We understand contractors throughout the region are in high demand. Renovation projects may help homeowners to add value to their properties, spurring healthy activity for local small businesses and merchants.”

In June, there were 1,697 new listings, up 5.3 per cent from the same month in 2016, a sign that more sellers are getting in the market.

But the total inventory of homes on the market is still down about 40 per cent from the same period last year.

Last week, the Bank of Canada raised its benchmark interest rate to 0.75 per cent. Banks are responding by increasing their rates, which could spell the beginning of the end of the cheap mortgage rates that have helped fire Canada’s hot housing market.

But in the short term, Smith said, that is only likely to spur more sales as buyers move to lock in long-term fixed mortgages.