Interest rates

Home sales in the London area fall to their lowest level in 10 years as interest rates rise

Just 504 homes sold in the London area last month – the lowest on record for October in the last decade – as the average house price rose for the first time since February, according to new figures released on Thursday.

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Just 504 homes sold in the London area last month – the lowest on record for October in the last decade – as the average house price rose for the first time since February, according to new figures released on Thursday.

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Although home sales fell to their lowest level in 10 years, the number of new listings – 975 – remained at the same level as the October average, according to the latest market overview from the London and St. Thomas Association of Realtors (LSTAR).

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The decline in home sales is concerning in the short term, said Randy Pawlowski, president of LSTAR.

“I think what’s happened is people are on the sidelines to see what’s going on with these interest rates, and that’s slowed the pace of sales. And, secondly, prices average sales declined, maybe not as quickly as what we saw at the start of the year,” he said.

The Bank of Canada raises its key rate to fight inflation. The central bank’s benchmark interest rate rose to 3.75% from 0.25% in early March.

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Still, there are signs the market is “stabilizing,” Pawlowski said.

The average selling price of a home rose slightly from $635,250 in September to $640,570 last month, ending a seven consecutive months of falling prices. October’s average price is 4.1% lower than a year ago, but nearly 22% higher than October 2020, according to LSTAR figures.

“I think there’s a real, strong demand for interest from potential buyers. They’re just being cautious with interest rates right now,” Pawlowski said.

Another promising indication is the October sales-to-new listings ratio, which climbed to 51.7% from 42.4% the previous month. “We’re seeing listings come to market and sell out in a relatively short timeframe,” Pawlowski said.

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Single-family homes remained the hottest product on the market last month, with about 363 sales, followed by townhouses with 73 sales.

Despite the lowest number of units sold – 37 – in October, the average price of a condominium apartment in the London area rose, unlike single-family homes and condominiums which saw a year-on-year decline. the other, Pawlowski noted.

The average price of a condominium apartment in the LSTAR region, which includes London, St. Thomas, Strathroy and parts of Elgin and Middlesex counties, jumped to $416,516, up 8% from last year. October of last year, according to the figures.

“We’re seeing a ton of activity in the apartment sector,” Pawlowski said.

“A lot of buildings that appear to be built are primarily rental properties rather than condominiums. These prices tend to fluctuate quite a bit, depending on how far along the planning process is for some of these buildings and the status of pre-sales versus rental numbers. »

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Housing supply in the region’s market remained stable with 3.2 months of inventory in October, down slightly from 3.4 the previous month, and 1,620 active listings.

“There’s a lot of inventory to choose from, and that’s usually a good sign,” Pawlowski said, noting that there’s “high demand” from buyers in our city and other centers.

“When you look at the average selling prices not just in the province, but across the country, London is still relatively affordable by comparison, so I think we’re in good shape,” he said.

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