Home prices and sales continued to cool last month in London and St. Thomas, a reflection of interest rate hikes that have also led to an increase in inventory to a monthly level not seen in years, the London and St. Thomas Association of Realtors (LSTAR) said Wednesday.
At least 497 homes were sold in London and St. Thomas last month, according to the organization’s latest monthly statistics, a decrease of 110 (18 per cent) from the previous month, and 367 fewer (42 per cent) than September 2021.
At the same time, the region saw increased housing supply, rising from 2.7 months of inventory to 3.4 months, the highest recorded for September since 2015. In comparison, September 2021 had just 0.6 months of inventory.
In addition, average home prices continued to fall, ending the month around $635,256, a decrease of more than $12,500 from August, while the composite benchmark price fell $2,600 to $596,900 — trends that have been seen in most markets across Canada, according to the Canadian Real Estate Association.
September’s average is the lowest seen in the region since August 2021 when the average sale price stood at $620,000. In February, the local market saw a record average price of $825,221.
In a statement, Randy Pawlowski, LSTAR’s 2022 president, pinned the impact on home sales and prices in the region to the five interest rate hikes that have been announced this year by the Bank of Canada, with the latest happening last month.
The Bank of Canada raised its benchmark interest rate three-quarters of a percentage point Sept. 7. The central bank’s policy rate now stands at 3.25 per cent, up from 0.25 per cent in January.
LSTAR says at least 1,171 new listings and 1,692 active listings were reported in September, up 9.3 and 3.2 per cent, respectively, from August, and up 14.6 and 314 per cent, respectively, compared to February when prices peaked.
Listings were on the market an average of 22 days, unchanged from August, and up from seven in February and in August of 2021.
According to LSTAR, single-family homes continue to be the most popular style, with 365 sold last month.
Canada’s benchmark average stood at $746,000 in September, down from $760,400 in August, according to MLS.
— with files from Global News’ Craig Lord
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