Metro London, Ontario
Real Estate Trends and Price Forecast

HIGHLIGHTS

• Metro London home values have been volatile since 2021, and are now relatively stable.

• While industry experts saw signs of improvement in late 2024, conditions have since deteriorated.

• Multi-factor analysis identifies Metro London as a moderate-risk real estate market.

• Mortgage rates have eased from their peak, but remain high relative to the 2010–2020 average, limiting buyer budgets.

• Economic uncertainty is rising due to Canada’s recent migration policy shift and the Trump administration’s tariffs, which could further weigh on the market.

This article covers:

1. What is the state of the London property market?

2. Where are prices headed?

3. Should investors sell?

4. Is this a good time to buy?

1. What is the state of the London property market?

London Ontario Property Market Overview

Metro London, Ontario has a population of approximately 500,000 and is a growing city known for its strong economy and vibrant community.

• Thriving Job Market: London benefits from a diverse economy with strengths in healthcare, education, manufacturing, and technology. With a mix of large employers like the London Health Sciences Centre and Western University, the city offers a wide range of job opportunities.

• High Quality of Life: Known for its affordable cost of living and family-friendly atmosphere, London consistently ranks as one of the best places to live in Ontario. The city offers a mix of urban amenities with a relaxed, small-town feel.

• Access to Nature: London is rich in parks, gardens, and green spaces, such as the Thames River, Victoria Park, and the nearby Fanshawe Conservation Area. Outdoor enthusiasts enjoy a variety of recreational activities year-round.

• Education Hub: As home to Western University and Fanshawe College, London offers excellent educational opportunities, making it an attractive destination for students and academics.

• Cultural & Historical Appeal: London boasts a vibrant arts scene, with numerous galleries, theatres, and music festivals, alongside a rich history that includes landmarks such as the Banting House National Historic Site.

• Diverse & Growing Community: London’s multicultural atmosphere is reflected in its many cultural events, restaurants, and local markets, making it a welcoming and inclusive city for newcomers.

• Efficient Transportation: London’s public transportation system is well-connected and continues to grow, with ongoing infrastructure improvements, including expanded bike lanes and better connectivity between key areas.

Overall, London offers a balance of economic growth, an active lifestyle, excellent education, and a welcoming community, making it an ideal city for young professionals, families, and students alike.

The real estate statistics for Metro London include St. Thomas, Middlesex, and Elgin Counties.

Metro London Detached House Prices

Since peaking in the spring of 2022, housing demand has collapsed. While prices initially rebounded due to constrained supply, a steady rise in inventory in recent months suggests the market may shift once again.

We believe politicians are implementing policies to guide the market toward a typical annual real estate cycle with price growth of 1 to 3% annually – in line with income growth.

Demand (i.e., purchases) in London is low. Many people want to buy a home, but affordability is so poor that would-be buyers have been sidelined.

New homebuyers can’t afford to get on the first step of the homeownership ladder, and households who want to climb the next rung (i.e., upgrade to a larger home) can’t qualify for a new mortgage at the current rates.

Meanwhile, the total active listings are trending upward. They are at their highest level in three years.

Metro London New Construction Home Prices

Prices of new homes are dropping. Some homeowners in new developments who bought pre-sales in 2022 might find they will have paid much more than their new neighbours. Based on economic fundamentals, this trend is likely to continue.

Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes

Even though the market is softening, construction remains near record levels.

Market Risk

Based on Mortgage Sandbox Analysis, London is at moderate risk of a significant market correction.

Metro London Condo Apartment Prices

After breaking records during the pandemic, Metro London apartment values are flat. Compared to other Canadian cities, a London condo is still relatively affordable.

With more people working-from-home, we expect developers will begin marketing larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.

At Mortgage Sandbox, we would like developers to build 4 and 5 bedroom condos because:

• Not everyone can afford to buy a house for their family.

• Canadians who now work from home need more room to segregate workspace from living space within their homes.

• Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

• Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Metro London Townhouse Prices

Still a challenge for first-time homebuyers

London house prices have become much less affordable. A homebuyer household earning $75,500 (the median Metro London household before-tax income) can get a $310,000 mortgage. That’s enough to buy a benchmark condo, but buying a house is out of reach for more than 70% of locals.

Houses are for the rich, but most of the land is zoned for single-family detached houses. 🤔

What about other parts of Ontario?

Read the Toronto Forecast, Ottawa Forecast and the Hamilton Forecast.

1. Where are prices headed?

There is a lot of uncertainty in the forecasts for looking out toward 2027. Many of the forecasters we've surveyed have different expectations for:

• Will the federal government’s recent migration policy pivot lead to a shrinking population?

• Will mortgage rates drop to the 2 to 3 percent range that Canadians have grown used to?

• Will Trump impose a 25% tariff on Canada, leading to a trade war and recession?

How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.

At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms, and we then present the most optimistic estimates, the most pessimistic prediction, and the average forecast.

Do you want to learn more about real estate risk? We've written a comprehensive report explaining the uncertainty level in the Canadian real estate market.

Our forecast inputs:

• CMHC Housing Outlook

• Fitch Ratings Global Housing Forecast

• Reuters Housing Forecast Poll

• Royal LePage House Price Forecast

• RE/MAX Housing Market Outlook

• Canadian Real Estate Association Quarterly Forecast

• RBC Home Resale and Price Forecast

• TD Bank Economic Housing Outlook

• BMO Housing Outlook

• C1 Central 1 Ontario Outlook

3. Is this a good time to sell an London property?

From a seller’s perspective, more changes in the market influence prices downward, so this year may be a better time to sell than in two years.

The annual real estate cycle usually favours sellers in the first half of the year.

Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check out our Complete Home Seller’s Guide.

4. Is this a good time to buy a London home?

Prices have been falling or flat, and supply is high, so prices could fall further. Mortgage rates are relatively high and falling. Also, the annual real estate cycle usually favours buyers in late summer and autumn.

These factors would lead buyers to conclude that later in 2025 or 2026 will be a better time to buy than now.

It's almost impossible to time the market perfectly. However, if you are buying your forever home and don't plan to sell for ten years, the risks of buying now are lower than a year ago.

If you are considering buying, be sure to drive a hard bargain and pay as close to market value as possible. Also, don't bite off more than you can chew when it comes to financing.

Planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

Here are some recent headlines you might be interested in:

• Canada housing market unlikely to surge despite plunging interest rates (MPA | Mar 14)

• Millennials, gen Z in 'Goldilocks moment' to jump on Canada's property ladder (Financial Post | Mar 12)

• Bank of Canada cuts interest rate to 2.75% as country faces 'new crisis' from tariffs (CBC | Mar 12)

• Housing market faces “uncertainty” amid economic and geopolitical shifts: CMHC (REM | Feb 10)

• Tariff threat, recession fears will slow Toronto’s real estate market, experts say (The Toronto Star | Feb 06)

• Toronto home sales expected to rise 12% this year, but board says January saw drop (CBC | Feb 06)

• Buyers’ market: Toronto-area January home sales down nearly 8 per cent year-over-year as prices creep up (The Toronto Star | Feb 05)

• How a trade war and U.S. tariffs could hit Canada’s housing market (Global News | Jan 29)

• Toronto's condo rental market spiked in 2024, data shows (RENX | Jan 22)

• Canada doesn’t need bigger cities to solve the housing crisis, report finds — it needs more cities (The Toronto Star | Jan 21)

• Toronto new condo sales fall to 28-year low as investors retreat (BNN Bloomberg | Jan 16)

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