January 15, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic downturn is affecting the London Ontario Housing Market
London, Ontario - Credit b0ratDI, Flickr
London Ontario has had a small decrease in housing starts and is returning to the historical low levels of housing starts of years gone by and the housing starts are down 29%. CMHC is forecasting 732 units single-detached starts, 15 semi-detached units, 10 apartment condominium ownership units, and 10 apartment rental units, for a total of 767 housing starts for 2008. This will decrease by 400 units in 2009.
SINGLE-DETACHED FORMS OF HOUSING POISED FOR ANOTHER STRONG YEAR
This year Canada Mortgage and Housing Corporation predicts that London Ontario will surpass the housing start levels of 2006, and 2007 by pouring more than 700 foundations. However, in 2009 Canada Mortgage and Housing Corporation predicts that there will be only 400 single-detached homes started, a decrease of 29% from 2008.
LONDON’S RESALE MARKET WILL BE MODERATE
Canada Mortgage and Housing Corporation states in its outlook report that after 6 years of consecutive double-digit price growth, the resale market in London will balance itself off in 2009. In 2007, the average MLS price for a detached home is currently $205,000.00 in 2008 and we will see a 2.5% increase in 2009, to push the resale average price to $211,000.00.
LONDON MARKET TIPS INTO BALANCED CONDITION
As London Ontario has experienced substantial price growth over the past 3 years, Canada Mortgage and Housing Corporation predicts that there will be continued but moderate growth in 2009. However, in major commercial projects there will be over $15 million worth of projects that are commencing in 2009 for London and the surrounding areas, concentrated in London Ontario.
MORTGAGE RATES
Canada Mortgage and Housing Corporation predict that interest rates will decline by a further 25-50 basis points from their current levels in 2009. However, due to the cost of borrowing to the Canadian banks from the markets, the mortgage interest rate will marginally increase in the latter half of 2009, but not significantly enough to negatively affect the housing market in London and surrounding areas.
You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64327/64327_2008_B02.pdf