How will London's market strength affect buyers in 2017?
With low inventory and soaring prices, London is expected to continue to be a strong seller's market for 2017.
Ontario endures as an epicentre of Canadian housing activity, a fact that is readily apparent in the recent numbers from London, which remained a strong seller’s market in 2016 and is poised to continue surging forward this year.
The London-St. Thomas Association of Realtors announced that the overall average price of homes (across all types) sold in 2016 grew by 5.5 per cent year-over-year, up to $279,057.
London’s average detached home price last year increased by 5.4 per cent from 2015 (up to $297,480). Meanwhile, condominium values increased by 5.6 per cent in the same time frame (up to $200,335), The London Free Press reported.
Sales volume in the city saw a more significant 8.8 per cent annual increase, up to 10,193 homes sold in 2016. Scarce supply helped the market along as well, with a 39.2 per cent year-over-year drop in London-St. Thomas listings.
Ontario’s relatively outsized performance has led to some consternation among various industry observers, who have expressed anxiety about where the continuous increases in demand and home prices in the province will lead to.
A noteworthy example of this growth is a three-bedroom semi-detached home on Palmerston Ave. in Toronto, which got listed on the market for $1.375 million last week. The property was purchased in December 2014 for just $851,750—fully over half a million dollars less than its current price, and representing a sharp 62 per cent appreciation in just 2 short years.
Realosophy president and broker John Pasalis noted that the listed value of the Palmerston home would have purchased a larger and more spacious house as recently as last summer.
“If this is getting $1.4 million what does that mean for anyone who wants to buy in this neighbourhood?” Pasalis said. “When you see appreciations of 30 per cent a year it generally doesn’t end well. That’s a concerning thing.”