'Right now were in a bit of that hidden and pent-up demand': The promise of interest rate stability could reinvigorate the housing market
Displays were being erected Western Fair District's Agriplex, as they were getting ready for the first Lifestyle Home Show in London since the beginning of the pandemic.
"It's the first time in three years. The last time was January 2020, just before COVID hit,” says Jared Zaifman, chief executive officer (CEO) of the London Homebuilders’ Association — the agency that organizes the three-day show.
The home show has attracted 300 exhibitors, mostly businesses that build, renovate and decorate homes. The question for many is how will higher interest rates impact their businesses? Zaifman says it’s been a challenge.
"I understand, certainly, the broader economic perspective,” he said. “Where inflation is coming in and the government needs to try and do something to help stem that, because even from a supply chain perspective building costs have risen tremendously over the last couple of years."
Zaifman says the rate increases have slowed home sales and prices have dropped. The conundrum comes from messaging from various organizations that a lack of affordable housing needs to be addressed. It's a point Zaifman has taken to Ottawa.
New condo townhouse units are being constructed in west London. The London Homebuilders' Association hopes a pause on Bank of Canada benchmark interest rate increases will reinvigorate the market pictured in London, Ont. on Thursday, Jan. 26, 2023. (Gerry Dewan/CTV News London)"They say 'What's the biggest problem? What's the biggest challenge?' and it's interest rates. We know that we need more houses and that's something all levels of government want us to be doing,” he said.
Zaifman believes what many people are looking for is some form of interest rate stability. Once that happens the housing market will pick up again.
“Right now were in a bit of that hidden and pent-up demand,” he said.
The construction industry has been buoyed by government and industry investments. Especially institutional projects like Ronald D. Schmeichel Building for Entrepreneurship and Innovation, currently under construction on the Western University campus.
"We're still at a very high level of construction,” says Mike Carter, executive director of the London and District Construction Association. “For anybody that's looking at this, I will tell you, that is a tremendously positive commitment to the future."
Exhibitors prepare their booths for the 2023 London Lifestyle Home Show, which runs over the weekend pictured in London, Ont. on Thursday, Jan. 26, 2023. (Gerry Dewan/CTV NEws London)There are still other issues to be dealt with, like a lack of skilled labour. Some tradespeople have retired and agreed to come back to work, but they want reduced hours and flexible schedules.
Carter calls it ‘working selectively.’
“They’re on a nice pension, they’ve got a good post-fulltime-employment life…. and I see a bunch of them working selectively. Which is good for them but a challenge for everybody working on the supply side of it.”
Zaifman and Carter both believe the next decade for the London-area remains encouraging, as new Canadians and those from the Greater Toronto Area continue to make London a favoured place to locate.
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