By examining transactional data from the London and St. Thomas Association of Realtors (LSTAR), this report addresses the following questions:
- How has demand from the Greater Toronto Area (GTA) influenced London’s resale market?
- Did a high level of repeat sales contribute to the strong sales activity recorded in London in 2017?
Homebuyers from the GTA purchased an increasing number of high-priced single-detached homes in the London census metropolitan area (CMA) in 2017. These buyers contributed significantly to the record level of MLS® sales and rapid price growth recorded for the first half of that year. In addition, as sales activity and price growth increased, repeat sales in London’s resale market became more pronounced. This is because a higher proportion of homes were being purchased and sold in less than a year.
- A higher level of demand spilled over from the GTA to the London CMA in the first quarter of 2017. This was especially true for homes in the higher price categories. GTA buyers accounted for 9% of all transactions and 20% of transactions for homes priced over $450,000. This was a substantial increase from the general trend, as GTA buyers accounted for only 3% of transactions between 2015 and 2016.
- Purchase activity by GTA buyers was concentrated in the City of London, especially in North and South London. It was quite limited in other areas of the London CMA.
- Overall, strong GTA demand and GTA buyers’ higher propensity to purchase expensive homes contributed to record MLS® sales and rapid price acceleration.
A high level of repeat sales was also a contributing factor to strong sales activity in 2017. Many homes were purchased at a low price in less expensive areas in 2016 and resold for large gross profits (average of 22%, or $49,027) in under a year.