Recent interest rate hike keeps London-area real estate market tepid

Stock photo of a home for sale. Photo courtesy of tkoch via Pixabay.

Another interest rate hike by the Bank of Canada in September seemingly kept London and the surrounding area’s real estate market fairly calm last month.

The latest figures from the London St. Thomas Association of Realtors (LSTAR) shows signs that the market is starting to stabilize as the number of homes sold in the region in September fell yet again with 497 properties exchanging hands compared to the 607 sold in August.

“An additional interest rate hike, the fifth one so far in 2022, continues to impact home sales activity,” said 2022 LSTAR President Randy Pawlowski.

Inventory levels in the area continue to inflate with LSTAR reporting 3.4 months worth of inventory in September, up from just 2.7 the month before. The number of listings on the market has risen significantly when compared to January 2022, when there was only two weeks worth of supply available.

“We are experiencing increased inventory levels, indicating a more balanced marketplace,” Pawlowski said. “For historical perspective, the 3.4 months of inventory is the highest recorded for the month of September, since September 2015.”

The average price of all homes sold in the London-area also dipped from $648,036 in August to $635,256 in September. This amount is also slightly lower when compared to September 2021’s average of $641,822, and significantly more affordable compared to just seven months ago, when LSTAR recorded a record-breaking sale price average of $825,221 in February 2022.

Aside from Middlesex Centre, homes in north London proved to be the most expensive with an average sale price of $759,555 in September. Houses in east London sold for much less with an average sale price of $495,326. Properties sold in St. Thomas last month ranked in the middle at $541,569.

September 2022 marks the seventh consecutive month of decreased average sale prices locally.