First-time home buyers priced out of London's hot real estate market
People who were waiting to buy homes during the pandemic are coming off the sidelines
The average price of a home in London has climbed nearly 20 per cent since this time last year, meaning first time buyers are being priced out of the market, according to a local real estate agent.
The London and St. Thomas Association of Realtors (LSTAR) said in the month of July the average price of a home — including single detached homes and high-rise condos — was up 19.6 per cent to $484,884.
Because many homes are getting multiple offers and are selling for more than the asking price, Rafi Habibzadeh, a real estate agent with NuVista Realty in London, said it's "very hard" for first time home buyers to get into the market.
"I've had clients put offers on four or five properties, because there is only so much that they're qualified for in terms of the mortgage," he said.
"We actually had one last week, this was a $2.1 million house, and that one went multiple offers and we ended up selling it above asking."
This is happening, said Habibzadeh, because pandemic restrictions are relaxing.
"A lot of people have been waiting since the pandemic started, they were waiting at the sidelines to see where things were going … more people [now] have confidence in the market."
Selling a home during the pandemic
There were 856 homes sold in London in July, and 1,275 homes sold across LSTAR's jurisdiction, according to the association. Most homes exchanged hands in London's south end, where there were 336 homes sold and where there was the biggest price gain compared to July, 2019.
The average price of a home in south London, which includes data from the western part of the city, was $449,448 in the month of July. The average price of a home in east London was $380,365. In the north end, the average sale price was $562,529.
Homes are staying on the market, according to the Canadian Real Estate Association, for an average of 10 days.
Habibzadeh said he was surprised when on Sunday, during his first open house since the pandemic shut down, 12 groups of people showed up for a tour.
"It was between two and four o'clock and I expected maybe a couple groups, two, three, four or five groups, to come in," he said. "I had people waiting outside in a line to get in the house."
Habibzadeh said he had four people inside the house at a time, and they followed masking and physical distancing rules.
He also said there are no signs of relief for first-time home buyers trying to break into the market — unless a second wave of COVID-19 slows things down.