London

Demand for space in pandemic fuels London, Ont. real estate surge for 3rd straight month

It seems the same things that matter in real estate also matter when it comes to physical distancing: location, location, location.

The city has set another real estate record in what's usually considered a slow period

The average London home is now valued at $555K as the pandemic has created a surge in demand as people seek out more space. (Colin Butler/CBC News)

The coronavirus pandemic is fuelling a surge in demand for London, Ont. real estate as more people look to upsize their homes in a world where kitchens have become makeshift offices and the commute is walking from the bedroom to the living room. 

For the third straight month, the London and St Thomas Association of Realtors posted record-breaking sales figures, despite the unprecedented health crisis that's gripped the country and all the economic uncertainty that comes with it. 

Sales in November were up across the London region by 33 per cent over the previous year, with 854 homes bought and sold, the most ever seen during the month since record keeping began in 1978. 

The phrenetic activity pushed the value of an average London region home up 28.8 per cent to $536,178 and almost $100,000 above last year's prices. It's a jump analysts say they had not predicted. 

Empty nesters, telecommuters help drive demand

More people from the GTA are trying to escape scenes such as this when they come to London, Ont., or since the pandemic began, simply feel safer in a city where people aren't so tightly packed together. (Lars Hagberg/The Canadian Press)

London and St Thomas Real Estate Association president President Blair Campbell told CBC News Tuesday that the surge is the result of a combination of factors affecting the market. 

"We've had really high levels of demand, part of that is buyers coming from out of town, largely from the GTA."

Campbell said the out of town buyers are largely people looking to work from home who, thanks to technology, no longer have to live and work in the same community as well as people who are getting older and looking for a slower pace of life outside the big city.

"You have a number of people that are looking to cash out essentially, if they live in Toronto or the surrounding area, and they can come here and buy a similar home for a lot less money, it's a great way to fund a retirement." 

In most cases Campbell said the trend was already happening and many of the buyers were contemplating making the move, but the coronavirus, which has forced many people to contemplate their mortality while living in a state of defacto house arrest, has only sped up the process. 

"Why wait? They're working from home for the foreseeable future and obviously to live to a less populous area during Covid is attractive to many people." 

This year, pools are in high demand

They never used to be, but as people hunker down at home backyard pools are becoming increasingly important selling points in real estate. (Galit Rodan/The Canadian Press)

Tight housing inventories, combined with the safety precautions in place to avoid spreading the virus, is also pushing people into take the plunge more readily than they would if the pandemic were not happening, Campbell said.

"Quite frankly people are spending more time at home, which we've been advised to do."

"Working from the dining room table is not that much fun, some people want a larger home with more office space. Other people are home schooling their children, so they want more space for that to take place."

Campbell said houses in the $600,000 to $700,000 range are now becoming the subject of bidding wars, when before the pandemic they normally sat on the market for weeks, months or even years. 

People are also seeking homes with more entertainment as leisure space, such as pools, which he said weren't traditionally a popular feature before the epidemic. 

"If you're at home, you can't travel anywhere, so it would be nice to have some time around the pool with the family." 

"This year in particular, pools are in very high demand," he said. ""It's strange because in previous years we said pools don't add a lot of value."

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