London Housing Market Outlook 2023
Your Definitive Guide to the London & St. Thomas Housing Market in 2023.
Market Report Summary for June 2023
- London’s average home sale price decreased 24.6% year-over-year to $621,912 for June 2023. While in comparison, provincially, the average home sale price is down 18.2% from a year ago to $1,081,500.
- The average price of a single-family home in London decreased by 25.2% year-over-year to $673,226 for June 2023. While in comparison, provincially, the average single-family home sale price is down 18.8% from a year ago to $1,189,100.
- The average price of a town/rowhouse in London decreased by 26.2% year-over-year to $657,333 for June 2023. While in comparison, provincially, the average town/rowhouse sale price is down 17.4% from a year ago to $847,500.
- The average price of a condo in London decreased by 24.55% year-over-year to $429,419 for June 2023. While in comparison, provincially, the average condo sale price is down 14% from a year ago to $734,500.
- The average rent for a 1-bedroom apartment in London increased by 29% year-over-year to $1,774 for June 2023. While in comparison, provincially, 1-bedroom apartment rents are averaging $2,180, up 16.9% from a year ago.
London Housing Market Outlook
As of June 2023, data from the London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA) indicates that the average home price in London is $621,912. Over the last month, there have been 1320 new listings, and the median number of days a home is on the market is 21 days.
London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
London house prices decreased by 24.2% compared to a year ago. However, housing prices increased by 1.4% in the last three months. As prices increase incrementally, we see more balance returning to the market, albeit slowly.
Additionally, London’s sales-to-new listings ratio (SNLR) stands at 57.3% as of June 2023, showing power is still in the buyer’s hands as the market edges on the balanced territory.
(For context, a market is considered a buyer’s market when the SNLR is 70% or more since a higher proportion of sales than listings indicates lower demand relative to supply.)
Who’s Buying London Real Estate?
Until recently, the primary demographics driving demand in London’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s university towns, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in Toronto while maintaining a commutable distance in London.
With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the London homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in London will have an impact; according to Statistics Canada, foreign investors make up less than 5% of the city’s total homeownership.
According to a report by Teranet, investors and multi-property owners accounted for over 25% of Ontario’s homebuyers in 2021, particularly in London, where the numbers were even higher. A report by StatsCan, which tracks the concentration of residential properties owned by investors across Canada, said investors own 29,530 out of the city’s 34,180 condominium apartments, a rate of 86.4% – more than twice the provincial average of 41.9%.
Upsizing by buyers has driven London’s demand for single-detached homes, which showed the highest year-on-year price increase of all property types from $432,525 in February 2020, which is still more than 34% higher than today’s price at $657,333. Upsizing buyers also continued to explore secondary markets like Mississauga, Hamilton, Brampton, and Burlington over the last 6 months.
Immigration & Out-of-province Migration
While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making London homes a continued surge. Although many Londoners continue to leave London due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.
Getting a mortgage in London as a first-time buyer can be challenging for many as London has some of the highest property tax rates for a large city, with over 1.42% of property value in 2022.
While programs like the First Time Home Buyer Incentive are in place to help people afford homes in the city, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $150,000.
Given the slowdown over the last 12 months in home prices, London remains a difficult market to purchase a first home without outside financial assistance. Unsurprisingly, first-time homebuyers are no longer the largest segment of the city’s real estate market.
Average Home Prices in London for June 2023
With the Bank of Canada finally pausing its rate-tightening cycle, now may be the perfect time to buy a home in London before the storm. Many experts say the housing market should pick up by the end of 2023, when rates are expected to decline. Timing the market in London is precariously hard as the pent-up demand on the sidelines is ready to pounce at the perfect combination of lower prices and rates.
In June 2023, the MLS® System of the London and St. Thomas Association of REALTORS® (LSTAR) recorded only 436 residential transactions, thus marking the lowest number of February home sales seen by LSTAR since 1995.
Despite the sluggish sales, 761 new listings entered the market during the same time frame, bringing the number of active listings to 1,320 by month-end. The overall sales-to-new listings ratio for the entire jurisdiction of LSTAR was 57.3%.
Compared to a year ago, the average home price and the composite MLS® Home Price Index (HPI) Benchmark Price were significantly lower, down 24.2% and 25.1%, respectively. Despite this, both metrics saw modest month-over-month growth. LSTAR’s average home price was $621,912 last month, while the composite MLS® HPI Benchmark Price was $583,500.
Below we have compiled some insights from London’s real estate experts at the London and St. Thomas Association of Realtors (LSTAR)
London House Prices & Sales
London Condo Prices & Sales
London Historical Housing Price Changes by Property Type
Breakdown by District
More generally, London and Ontario real estate has seen some of the most widespread and persistent levels of price appreciation in the last 20 years. Driven by property investment, upsize buyers, immigration and provincial migration as of June 2023.
Residential sales activity in the London and St. Thomas area slowed in the fourth quarter of 2022 compared to the fourth quarter of 2021. Residential property sales numbered 1,242 units in the fourth quarter of 2022, down significantly compared to the same quarter in 2021.
Sales slowed by 41.8% for single detached homes, 42.7% for townhouse and row units, and 51.5% for apartment units compared to a year earlier in the fourth quarter.
Annually, residential property sales numbered 7,631 units in all of 2022. This was up 9.9% compared to the 6,946 units recorded in 2021.
Breakdown of sales data for the London district within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
Breakdown of sales data for the St.Thomas district within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
Breakdown of sales data for the Strathroy-Caradoc district within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
Breakdown of sales data for the Middlesex district within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
Breakdown of sales data for the Elgin district within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
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Breakdown by Property Type
More generally, Toronto, the GTA, and Ontario real estate have seen some of the most widespread and persistent levels of price appreciation in the last 20 years. Driven by property investment, upsize buyers, immigration and provincial migration as of June 2023.
More generally, London and Ontario real estate has seen some of the most widespread and persistent levels of price appreciation in the last 20 years. Driven by property investment, upsizing buyers, immigration and provincial migration, here is the breakdown within the London-St.Thomas Area as of June 2023.
Single detached home sales numbered 919 units in the fourth quarter of 2022, down significantly compared to the same quarter in 2021. Annually, single detached home sales numbered 5,545 units in all of 2022. This was down 30.7% compared to the 8,001 units recorded in 2021.
Townhouse and row sales numbered 180 units in the fourth quarter of 2022, down significantly compared to the same quarter in 2021. Annually, townhouse and row sales numbered 1,150 units in all of 2022. This was down 23.8% compared to the 1,510 units recorded in 2021.
Apartment sales numbered 98 units in the fourth quarter of 2022, down significantly compared to the same quarter in 2021. Annually, apartment sales numbered 681 units in all of 2022. This was down 36.4% compared to the 1,070 units recorded in 2021.
Breakdown of sales data by property type within the London-St.Thomas Region. Source: London and St. Thomas Association of Realtors (LSTAR) and Canadian Real Estate Association (CREA)
London Rental Breakdown June 2023
Average rental cost comparisons between London and other municipalities in Ontario or nationally.
Each $100K in mortgage balance costs an average of $550 per month for principal and interest on the current insured fixed rate and $620 per month on the current insured variable rate. Rates used for calculation are those offered on insured purchases with less than a 20% downpayment over 25 years of amortization. Each 0.25% change in mortgage rates impacts the monthly payment by $14 to $16 on a 25-year amortization.
London Rental Prices Compared to Other Canadian Cities
As the table below shows, London is the 11th most expensive city for rentals in Ontario and 17th nationally.
|Province||Total||Bachelor||1Bdr Average||2Bdr Average||3Bdr Average||Total YoY Change|
|North York ON||$2,497||$1,657||$2,174||$2,706||$3,376||24.10%|
Ontario Rental Prices Compared to Canada and the Provinces
As the data below shows, Ontario is the least affordable province for rentals after BC among the provinces, with a population of over 1 million inhabitants.
Average Rents by Housing Type
|Province||Total||Bachelor||1Bdr Average||2Bdr Average||3Bdr Average|
Rental Growth by Housing Type
|Province||Total YoY Change||Bachelor YoY Change||1Bdr YoY Change||2Bdr YoY Change||3Bdr YoY Change|
Frequently Asked Questions
Is the London housing market going to crash?
London home prices are currently sagging due to surging mortgage rates. London prices remain some of the highest in the country, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. London prices will recover quicker than in other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes.
Will London’s housing prices increase in 2023?
Although currently declining, many experts believe that a turnaround is imminent. Buyers are waiting on the sidelines for the opportune time to make a move.
How do I get approved for a mortgage in London?
To get approved for a mortgage in London, look at London mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in London at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote.
London’s property market is set to remain strong as increases are expected for the remainder of 2023. The average home price in London has dropped significantly over the last year. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the city has ever seen.
While the property market appears to be shedding value in London, it’s important to remember that this is relative to a long period of superheating in the area.
If you are looking for a home in 2023, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.
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