Jump in London home prices bucks national trend

A shortage of listings and strong demand continues to push up home prices in London, with average prices rising nine per cent in the second quarter compared with the same time period in 2017.

Aggregate prices in London up 9% in second quarter of 2018, while national prices rise 2%

The aggregate price of a home in London, Ont., rose nine per cent year-over-year to $365,686 in the second quarter of 2018, according to the Royal LePage. (Colin Butler/CBC News)

The average price of a home in London jumped nine per per cent in the second quarter of 2018, an increase well above the national rate of two per cent.

The numbers were released by Royal LePage and are based on aggregate prices calculated using a weighted average of the median values across all housing types.

The median price of a two-storey home in London rose to $404,520. During the same time, the median price of a bungalow rose 13.6 per cent year-over-year to $318,734.

Peter Meyer, owner of Royal LePage Triland Realty, said a lack of inventory and close proximity to Toronto continues to keep London prices on an upward trend at a time when national price growth is slowing.

"We are still experiencing a shortage of listings in London, which is putting upward pressure on prices in the second quarter of 2018," said Meyer. 

London's affordability advantage

He said London remains one of the "most affordable cities" close to the Greater Toronto Area. 

London's price growth is bucking a national trend, as prices slowed across Canada in the second quarter of 2018 due largely to softness in the Greater Toronto Area, where many regions have seen year-over-year price declines. 

Royal LePage CEO Phil Soper called the situation in Toronto a "spring market that never blossomed." 

He blamed tighter restrictions on borrowing as a reason for the national price cooling compared to the frantic spring of 2017, when prices shot up.

"The new federal mortgage stress-test measures slowed the market to a standstill in much of the country, as some families adjusted their expectations in a world with lower borrowing capacity," he said. 

Royal LePage projects that the aggregate price of a home in Canada will increase 1.9 per cent over the next three months. 

"The fundamentals have not changed," said Soper. "The economy is strong and unemployment is very low. We face shortages in our major cities, with many more people looking for homes than the market has available for purchase or rent. Upward pressure on prices will likely return to most markets this quarter."