London, Ont. housing market in flux

London’s housing market is going through a phase that sees the price of single homes dropping while rents for tenants are increasing sharply.

“Right now it’s not really working for buyers or renters,” says Mike Moffatt, a professor at the Ivey School of Business.

In February, the average sale price in London was $825,221 and just last month that dropped to $648,036.

“Yes, prices have gone down a fair bit but interest rates have gone through the roof,” adds Moffatt. “A year ago you could get a mortgage for under two percent and now you’re lucky if you get one under five per cent.”

At the same time, statistics from Rentalsdot.ca show that London’s rent increases are among the highest in the country with a jump of 26.5 per cent.

“That’s partly due to people not buying homes and renting instead but also London’s population is just booming," Moffatt says. 

Moffatt adds that the pressure could be eased if the rental inventory was better in London.

“We’re going to have to build more supply because quite frankly there are more people looking to rent properties than there are properties,” he says.