Mortgage Market in London Ontario
The 2011 Canadian census pegged the population of London, Ontario at 366,151. But, that is changing quickly. World Population Statistics predicts an increase of 4.6 per cent in 2016 and 4 to 5 per cent in each of the ensuing years. This article reflects on the state of the London housing and mortgage market as of Summer 2016, and what London Ontario Mortgage Brokers are facing to help customers realize the excellent opportunity here.
Economic drivers
The handsome St. Peter’s Cathedral Basilica has watched over a lot of history. It’s the historical home of Wolsey Barracks, the University of Western Ontario, and the Labatt and Carling Breweries. But, companies like 3M, Ford, General Motors, Toyota, and General Dynamics now drive the economy. So, too, do jobs in insurance, healthcare, and biotechnology that are diversifying the work, character, and financial resources of the labour force.
For whatever reason, housing starts are way up in London. Starts have been a bit depressed since the economic decline started in 2006. But, according to the CHMC Housing Market Outlook, London will issue permits for the start of 1,150 to 1,350 single detached homes in 2016, the first jump since 2011. And, new multi-unit addresses should reduce apartment vacancy rates to 2.7 per cent.
Balancing supply and demand
A diversified and expanding economy pushes a number of buttons. Current residents earn more and move up in terms of square footage and neighborhood. New jobs prompt people to relocate from inside and outside the region. Some fill the lowest paid opportunities, and others chase higher wages. And, local ethnic communities facilitate the international immigration of friends and relatives. Overall, population movement increases the demand for new and existing housing stock.
One study by the Altus Group claims, “one job is created for every three real estate transactions and approximately $55,000 in ancillary spending is generated every time a house changes hands in Ontario.” So when the area realtors report the record sale of 1,133 residences in June alone, it makes a statement.
Because of an aging and very mixed housing stock, the median sales price should likely settle in the $275,000 – $283,000 range. But, this still represents a continuing sharp upward trajectory over the last several years. Seniors are downsizing or relocating from significantly more expensive markets in Toronto and Ottawa.
The expected increase in five-year mortgage interest rates (from 4.4 to 5.0 per cent and later from 4.7 to 5.3 per cent) will also push buyers to act sooner, and the increasing economy puts more buyers in the pool. So, this sellers’ market will certainly continue well into 2017.
London mortgage brokers
London sits on the way to everywhere, a transit hub well situated on the Golden Horseshoe. Its well-established and diversified culture, population, and economy invites arrivals and makes them at home. Parks, museums, and multiple sports franchises keep citizens happy that they buy there. It’s the job of London mortgage brokers to match buyers with the financing they can afford and to help them through the sometimes complex process of application and closing.
