Through the roof: Inside London’s red-hot real estate market
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Market watchers agree on one thing: the London real estate market’s surging prices are highly unusual. But don’t expect the dramatic run-up in prices to last.
“If we were talking about an ideal situation, you would see home prices growing in line with traditional fundamentals like income, employment, GDP (gross domestic product),” said Scott, adding it’s “not very common” for prices to double in only four or five years, as they have in London.
That’s not to say anyone expects prices to fall; only, that they’ll rise less quickly. Abd when that cool-down will begin is anyone’s guess.
“We’ve got low interest rates, recovering employment, strong population growth and the desire of people to move from high-priced markets to maybe a more affordable area,” Wiebe said.
“And as long as those trends continue, then London, and towns like London, they are going to have strong resale markets.”
Though the COVID-19 pandemic remains a wild card, home prices already are worsening London’s affordability issues. More and more first-time buyers, for example, are turning to their parents to co-sign on mortgages.
Renters, too, are feeling the squeeze of high home prices, Kerr said.
“While those owning property are logically pleased, those that have yet to enter the housing market are going to be put in a bind,” he said. “This is particularly true as the rental vacancy rate has also fallen in our cities, and as a result, the cost of renting continues to climb.”
That underlines the need for more affordable housing, not only in London, but across Ontario, Campbell said.
“Supply is our biggest issue,” he said.
“And with a lot of interconnected parts, we have an opportunity now to explore how could we better look at housing supply and make it efficient and safe for people.”