The temperature of London’s housing market continues to rise, with new figures from the Royal LePage Housing Price Survey showing double-digit growth in the aggregate price of a home in the first quarter of 2017, with an increase of 12.4 per cent year-over-year to $314,777.
“The market that we’re in now is a definite sellers’ market,” said Royal LePage real-estate broker Peter Meyer.
“Over 70 per cent of the houses that are selling today in our marketplace are selling under multiple-offer scenarios. That in itself is unprecedented.”
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Meyer noted that there are between 10 and 20 offers on some London-based homes, with many selling for up to 25 per cent over the asking price.
“We have a shortage of supply, and obviously we are attracting a lot of buyers down the 401, who are attracted to the price range of our homes here in London.”
According to the housing price survey, the median price of a standard two-storey home saw a significant increase of 13.9 per cent year-over-year to $348,424. Bungalows saw a year-over-year increase of 9.9 per cent to $259,380. It doesn’t compare with the soaring prices in the Greater Toronto Area though; just last month, the average price of a detached home in the region was $1.21 million, up 33.4 per cent from a year ago.
“There’s talk of putting in a 15-per-cent foreign investor tax, similar to what happened in Vancouver… Well, if you do that just in the Toronto marketplace, the demand just moves down the 401 then.”
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During the London St. Thomas Association of Realtors (LSTAR) Annual General Meeting and Trade Show on Tuesday, CEO of the Ontario Real Estate Association Tim Hudak said he’s been having positive conversations with the province about keeping home ownership affordable, but emphasized the importance of having proper information before imposing a tax on foreign investments.
“Are they simply students going to Western or Fanshawe? Is it somebody who’s moving here? We attract over 100,000 immigrants to Ontario each year… so before you whack everybody with a new tax, make sure you’ve got the right data on what your target is before you act.”
As for how to increase the number of listings in London and throughout Ontario to even out the playing field for those looking to buy, Hudak said part of the solution is to reduce the red tape around building new subdivisions.
“It can take up to 10 years to get a new subdivision approved. Even when they check off all the boxes, [it’s] another 18 months before you can put a shovel in the ground. Every month, a delay means prices go up even higher.”
Hudak also mentioned that building up highways and railways between Toronto and London means new developments near those links, which would benefit those making the commute to Toronto and back for work.
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During a real-estate summit in Toronto on Tuesday, Federal Finance Minister Bill Morneau met with his Ontario counterpart Charles Sousa and Toronto Mayor John Tory to discuss soaring housing market prices in the GTA.
Morneau said Ottawa will help the province in a number of ways, including housing data collection and analysis, enforcement of tax compliance through Canada Revenue Agency, and anti-money-laundering rules.
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