‘Now’s the time to move’: London’s housing market remains sluggish, but local realtors expect movement soon

Although the home sales are down compared to May 2024, the number of listings continues to grow in the London and St. Thomas area, reports CTV's Gerry Dewan.

The Bank of Canada’s decision to hold the prime lending rate at 2.75% is seen as an encouraging move for the housing market.

Economic uncertainty continues to chill the housing market in the London region, but market watchers say the bank of Canada’s decision to hold the line on the prime lending rate could help thaw things out.

According to the London and St. Thomas Association of Realtors (LSTAR), home sales were down significantly in May compared to the same month last year. LSTAR chair Dale Marsh said having back-to-back provincial and federal elections to start the year didn’t steady help an already uneasy market.

“That creates additional nervousness, all right. So, we’re down about 17 per cent in the number of sales this year compared to this time last year,” said Marsh.

Marsh told CTV News that there are positive signs, with the number of listings continuing to grow.

Listings were up 24 per cent year-over-year, with inventory at a four-and-a-half-month supply. Marsh feels people are coming to terms with the economic environment.

“There’s also pent-up demand from buyers that, at some point, they’re going to get used to the government talks and the tariffs and eventually say, ‘Okay, now’s the time to move. We have to do it at some point.’”

What hasn’t moved in the London market is the price of homes, staying steady in this region despite the economic turmoil.

The average home price, just over $656,432, up 1.4 per cent year-over-year. Mike Hattim is a mortgage broker with Dominion Lending Centres. He believes that may be the result of an overheated market during the COVID years.

“I think that’s the biggest struggle for people is that they’ve spent so much on their homes years before that now they don’t have enough room to drop the prices,” he said.

Hattim said government measures to counter US tariffs and promote economic growth domestically could instill some confidence.

He believes the Bank of Canada’s decision to hold rates at 2.75 per cent may give the housing market a boost but feels another cut may be needed.

He’s already seeing sellers taking a bit of a haircut in an effort move property.

“I know one person right now that’s going to lose about $150,000 on their home. They spent quite a bit of money when they bought it and they’re desperate, they had purchased another home, and they didn’t have much of a choice. Now, thankfully, that loss is mostly equity that they would have wanted to take out.”

Hattim added, “They were still had enough to cover their mortgage but, unfortunately, they’re losing money. And I think that’s going to be the case for a lot of people.”

Marsh said the London region is still seeing unprecedented population growth and attracting significant new business ventures, like the Volkswagen PowerCo EV battery plant in St. Thomas.

He expects the market will adjust and continue to be an attractive option, “The London St. Thomas area is actually a cheaper market than, say, Kitchener, about half the price of GTA, right. So, a lot of people will drive from those areas and come this way because it’s a lot more affordable.”

Marsh is anticipating that home sales could start to ramp up through the summer and expects a strong market in the fall.