London real estate prices have been on a steep and steady incline in recent years, but despite this rapid growth, the city’s housing market ranked #8 of 16 Canadian cities when it comes to housing affordability, according to the 2020 RE/MAX Housing Affordability Report. While the region landed mid-way on the affordability scale, cost-conscious home hunters in search of a great price can still find a deal in the communities of Old East Village, Ealing Park and Bellwood Park, which have been named the most affordable neighbourhoods to buy a home in London.
Factors contributing to London real estate prices
London real estate prices have been on the rise, experiencing a 10-per-cent increase from 2018 to 2019, and another five-per-cent increase expected in this year (source: 2020 Housing Market Outlook Report). London’s growth continues, thanks to move-over buyers from the Greater Toronto Area over the past five years. These conditions are expected to continue this year, impacting housing demand and supply or London real estate. This is a contributing factor in the region’s mid-range housing affordability ranking.
In its inaugural Housing Affordability Report, RE/MAX examined 16 of Canada’s most-populous regions and ranked them on an affordability scale, with #1 being the most affordable and #16 being the least affordable. RE/MAX brokers were surveyed about average home sale prices and whether they believe real estate in their region is overvalued, undervalued, or right on the money. London real estate came in at #8 of 16 cities. Canada’s most affordable city to buy a home is Regina (#1) and the least affordable place to buy a home is Vancouver (#16).
RE/MAX’s affordability ranking was determined by assessing the percentage of a buyer’s monthly income needed to carry a mortgage, assuming a down payment of 25 per cent, and based on the forecasted 2020 average sale price per region and the forecasted 2019 average household income.
London real estate is currently considered to be undervalued, with an average sale price of $416,644. Because of its affordable prices, first-time homebuyers are active across all property types when entering the London real estate market. Consumer confidence is high in the region, and activity is steady, with buyers confident that they will find a property that is suitable to their needs and wants.
At the high end of the affordability spectrum, London’s least affordable neighbourhoods include Masonville, Hyde Park and Westmount.
Despite the commonly held notion that housing in Canada is unaffordable, the report finds that the vast majority of Canada’s largest urban centres (75 per cent) are currently undervalued, according to a survey of RE/MAX brokers in 16 of Canada’s most-populous cities.
In its report, RE/MAX explored the most popular property types sought by first-time homebuyers, the least and most affordable neighbourhoods in each of the 16 housing markets, factors preventing buyers from entering the market, and methods homebuyers are using to enhance the affordability of homes. Current and prospective Canadian homeowners were also surveyed about their sentiments around home ownership, barriers to owning a home, financial factors impacting home ownership, and what could potentially improve housing affordability.