London-area apartment sales hit record amid sky-high house prices

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As prices for homes remain sky-high, more buyers seem to be ditching the dream of buying a house and settling instead for apartment units as a way to enter London’s red hot housing market.

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A total of 83 apartments were sold last month in the London region, which also takes in Strathroy, St. Thomas and portions of Middlesex and Elgin counties, making it the best August on record for this type of property, figures released Friday by the area real estate association show.

August results come on the heels of July 2021 being the second-best July for apartment sales since the London St. Thomas Association of Realtors (LSTAR) began tracking data in 1978.

“It’s an affordability factor,” said Jack Lane, LSTAR’s president. “Those that want to get in the market, you know, are maybe compromising.”

The average resale price for all types of properties in the London region in August was $620,000, which represents a year-over-year increase of 23 per cent.

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While homes in even the cheapest area of the city, east London, are selling for about $484,000, the average price of an apartment is a comparably more affordable at $319,000.

Interest for apartments is coming from first-time homebuyers but also from people hitting retirement age and looking to downsize, Lane said.

“We’re looking at a greater influx from the Greater Toronto Area and other communities and some of those folks, if they’re in that retired, baby boomer category, they’re looking at condominiums, they’re looking in some case at some of the luxury rentals,” he said.

“We’ve certainly seen a big boom in that regard as well.”

The 83 apartments sold last month still represent a small portion of the 925 properties sold in the London area last month, which included 682 single detached homes.

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Though the apartment market is a segment that is drawing more interest from buyers and is expected to grow in the near future, the single-family home is still king, Lane said.

“The dominant preference still across the country is single-family home ownership,” he said. “That’s the dream of most Canadians and, for the majority of people, I don’t think that’s going to change.”

Average selling price by month – LSTAR

August 2021: $620,002

July 2021: $614,913

June 2021: $641,072

May 2021: $636,053

April 2021: $643,835

March 2021: $634,799

February 2021: $616,065

January 2021: $607,431

December 2020: $555,324

November 2020: $536,178

October 2020: $526,848

September 2020: $521,883

August 2020: $501,584