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.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
