Image: London Ontario Housing Market
London Housing Market Dec 2021 through 2022
With housing prices skyrocketing in Toronto and Ottawa, other Ontario cities have followed suit. The London, Ontario real estate market is no exception. In just one year, the average home price has increased by 37.5%, from $478,300 in December 2020 to $657,600 in December 2021. This surge is reflected in the average MLS® Home Price Index (HPI) benchmark price, providing a clear indication of the market's upward trajectory.
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The MLS® HPI benchmark price is a reliable measure of actual home selling prices, surpassing the average listed price. It takes into account various criteria to gauge the value of a typical home in the area. As such, it serves as a key indicator of the price trends in the London, Ontario real estate market.
Image: London Ontario Real Estate Market Average Price
Source: CREA.CA
The unprecedented rise in home prices in London raises concerns about whether it is a real estate bubble or an enduring trend. Experts attribute the surge to limited housing supply across the province. Although London is not directly linked to Toronto, the increase in remote work opportunities and a flourishing economy have rendered housing more expensive in every city across Ontario.
Image: London Ontario Real Estate Market Prices
Source: CREA.CA
Single-family homes continue to dominate the market, with 8,125 units sold in the London area in 2021. Townhouses and condos, although less prevalent, still saw significant sales, with 1,364 townhouses and 1,009 condos sold in the same period. However, there has been an overall decline in housing supply, exemplified by the 8.5% decrease in homes sold from December 2020 to December 2021.
Image: London Ontario Single Family Market Activity
Source: LSTAR.CA
Notably, the value of single-family homes has skyrocketed by 34.5% from December 2020 to December 2021, with an HPI benchmark price of $710,400 in 2021, compared to $528,300 in 2020. This increase sets London apart as one of the fastest-growing housing markets in Ontario.
Townhouses have seen an even more remarkable increase in value, with a 51.5% surge from $349,700 to $529,900 within a year. Although the data may be skewed by a short downtown period in December 2020, the one-year increase remains impressive at 42.6%.
Image: London Ontario Condo Market Activity
Source: LSTAR.CA
Condos also experienced substantial growth, with prices rising from $249,600 to $371,600, marking a 48.9% overall increase. While the December 2020 data potentially distorts the figures due to a dip in the market, October's price of $290,800 provides a more reliable reflection of a 27.8% increase.
To put these figures into perspective, the median household income for Ontario in 2019 was $91,540. This means that current home values in London are nearly seven times the income of the average Ontario family, even when factoring in Toronto's households. Based on a one-third income mortgage scheme, it would take 21 years for a median Ontario family to pay off a home in London.
Image: London Ontario Family Median Income
Source: Statistics Canada
London's housing market had more room to grow when compared to cities like Toronto, which led to steeper price increases in the past year. However, as the market catches up with other Ontario cities, the future becomes more uncertain. While there is still a significant gap in prices, it remains to be seen whether the area's potential for sustained growth can rival that of Toronto.
Additionally, the surge in new home construction in London will likely address the supply issue. From January to July 2021, housing starts increased to nearly 4,000 projects, compared to just 1,851 during the same period in 2020. As real estate prices continue to rise, this trend is expected to persist well into 2022 and beyond, eventually cooling off the market.
However, given the unpredictable nature of the past two years, it is crucial to expect the unexpected. No one can accurately predict the future of the housing market in these turbulent times. Stay informed and grounded as you navigate this ever-evolving landscape.
Full Stats from LSTAR by Most Recent Month
(LSTAR = London St. Thomas Association of Realtors)
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
