London

As the spring real estate market nears, there's very little to buy in London, Ont.

Realtors say if anything derails the traditional spring selling season in London, Ont., it won't be rising interest rates, but low inventory, a problem magnified by the glut of first-time and out-of-town buyers looking to move in.

Sales haven't stopped despite realtors reporting some of the lowest inventories yet seen

Realtors say if anything derails the traditional spring selling season in London, Ont., it won't be rising interest rates, but low inventories, which remain stubbornly low thanks to a glut of first-time and out-of-town buyers looking to move in. (Colin Butler/CBC News)

As the traditional spring selling season nears, realtors in the London, Ont., region say it won't be an expected borrowing rate hike on Wednesday that threatens to cool a hot spring housing market, but a lack of inventory. 

With such a lack of inventory, there's just not enough to go around.- Randy Pawlowski, LSTAR president

This year opened with the second best January on record in terms of home sales, according to the London St. Thomas Association of Realtors (LSTAR). It reported 529 homes sold in a month traditionally seen as a sluggish.

That same month, there were 669 new listings, of which 383 of them were snapped up, leaving only 286 homes for sale in the entire region, or, as LSTAR president Randy Pawlowski sees it, less than two weeks worth of inventory.

"The new listings will hit the market and they're gone within a week." 

'The hope is we see more inventory come to market'

"Honestly, this is the first time in my 25 years in this business where folks are calling and looking for housing and I'm having to say to them we're sold out or it's just hard to find." 

The 2021 census suggests the population of London, Ont., grew by 10 per cent, making it the fastest growing community in Ontario and the fourth fastest in Canada. Realtors don't expect that growth to slow down anytime soon. (Colin Butler/CBC)

Pawlowski, who runs a boutique brokerage with Sutton Group in Middlesex Centre, said the lack of inventory is putting a strain on the 2200 local realtors who are having a tough time finding a home for their clients. 

"Everybody thinks realtors are on their way to the bank every day, but with such a lack of inventory, there's just not enough to go around." 

"The hope is we see more inventory come to market."

First-time buyers, migrants from the GTA magnify shortage

What's causing the shortage, according to realtors, is the same phenomenon that made London, Ont., the fastest growing city in Ontario and the fourth fastest in Canada, according to the 2021 census. 

A recent report from Royal LePage says the median price of a home in London, Ont., rose by 30 per cent from $546,600 in 2020 to $710,700 in 2021. Realtors say they expect to see strong growth, despite a coming hike to the key lending rate. (Colin Butler/CBC News)

"We have a shortage of homes and too much demand," said Peter D. Meyer, the owner and broker of record with Royal LePage-Triland realty in London, who's been buying and selling homes in the region for 33 years. 

"We have a lot of people who are moving to London and buying but not adding any new inventory to the marketplace."

He said they include people moving from the GTA and overseas, as well as Millennials, who Meyer said are looking to put down roots and, because of their sheer numbers, have an outsize influence on the city's housing market. 

"That whole population is in prime buying mode," he said. 

Rate hike could strain overextended homeowners

It's because of those factors, Meyer believes, there will be no sign of any slowdowns when the Bank of Canada announces what's widely expected to be a hike in the country's key lending rate on Wednesday.

"We have a shortage of homes and too much demand," he said. "At the end of the day, people need a place to live."

Meyer said if the hike in the prime rate affects anything, it will likely be investors, who might pull back and wait for the things to settle down.

Pawlowski, meanwhile, thinks the predicted hike could force some homeowners who bought at too high a price to eventually sell, but not until the end of 2022. 

"Any of those rate increases will put a strain on their monthly payments and so, will the interest rate increases mean some of those folks are unable to afford the properties they're in? I suspect so."

First time homebuyer? 

CBC London is looking for you! We're looking for first-time homebuyers for an upcoming story on the city's real estate market. Please email londonnewstips@cbc.ca with your name, story and phone number. 

 

 

ABOUT THE AUTHOR

Colin Butler

Reporter

Colin Butler covers the environment, real estate, justice and urban affairs for CBC News in London, Ont. He is a veteran journalist with 20 years' experience in print, radio and television in seven Canadian cities. You can email him at colin.butler@cbc.ca.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?

now