High interest rates led to a more than 20 year low for home sales in the London-area in 2023, according to the London St Thomas Association of Realtors (LSTAR).
Newly released figures from the association show only 6,717 homes were sold last year. That is a drop from 7,658 in 2022 and 10,955 in 2021.
"2023 was the year with the lowermost number of units sold in LSTAR’s jurisdiction since we entered the new millennium," said 2023 LSTAR Chair Adam Miller. "This record low was caused by the high borrowing costs, which are weighing down heavily on the local consumers’ buying power," he added.
Over the past 18 months, the Bank of Canada has increased the key lending rate ten times. In its last decision delivered in early December, the central bank left the rate unchanged at 5 per cent. It's next scheduled announcement will come on January 25.
The moderate year for sales was capped off with what is considered a "subdued" December. Only 335 homes changed hands across the region last month, down from 421 in November and 488 in October. Of the 335 homes sold in December, 248 were single-family homes, 58 were townhouses, and 27 were apartments.
There was also a dramatic drop in the number of homes on the market last month, with just 386 listed compared to 928 in November.
"Our December data appears to indicate that some sellers are opting to delay their plans until the spring," said Miller. "Despite this, there are still quite a few individuals actively participating in the market."
The one area that did see an increase last month was in the average price of a home. It went up by $22,386 to $628,047, which is still slightly less than the average price of $629,605 recorded in October. The yearly average cost of a home in the London-area was $647,190, according to LSTAR calculations.
"When compared to the prices recorded in other provincial and national centres, homes within the LSTAR jurisdiction remained relatively affordable, positioning our region as an attractive housing market for many," Miller added.
