But can city keep up with growing need for more housing?
Is London prepared for the continuing onslaught of Millennials and post-Millennials — mostly from the Greater Toronto Area?
In the short-run — probably so; but in the long-run — probably not.
Real estate prices and rents are still on the rise for Londoners, but the cost of housing in the Forest City has to appeal to Greater Toronto Area residents paying about double the monthly rent for a place to live.
The little more than two-hour trip southwest to London would be too long a commute, but London’s economy and job market are thriving enough to provide motivation for a move. (Even though the jobless rate increased from 4.8% in May to 5.1%, per Statistics Canada, it’s still lower than the provincial rate of 5.2% and the national rate at 5.4%.)
A move to London might be especially enticing for recent college grads because it’s so difficult to pay rent in the GTA on a starting salary.
It actually doesn’t sound so bad to leave the big city for life in a smaller city with the added incentive of being able to afford a place to live.
London finished next to last for lowest average monthly rent ($1,022) for a one-bedroom home in Rentals.ca’s June national rent report, and the municipality landed at 28th of the 34 Canadian cities listed in the report for average monthly rent for a two-bedroom ($1,265).
London has the lowest average rents of all the 16 Ontario cities listed in the report. Ten of the top 12 cities for highest average monthly rent are in Ontario, according to the report.
So yeah, it’s much cheaper to live in London; the only other large Ontario city in London’s rental price range is Hamilton.
And, many retirees have already discovered one of the best-kept secrets in Ontario and staked their claim to the Forest City with affordable housing, access to great health care and transportation, a university culture, nine major parks attached to trails, and lots of festivals and concerts
Of course, if the high-speed rail project ever gets back on track cutting commute times by almost half from London to Toronto, the city of more than 7 million trees along the shoreline of the meandering Thames River could see GTA-like housing prices in its future.
Not to worry, Premier Doug Ford has paused the funding for the high-speed transit system planned to reach from Toronto through London to Windsor. The project, announced by the previous administration under Liberal leader Kathleen Wynne, is on hold. But keep in mind political parties can change like the weather.
So the next question becomes: Will London residents be priced out of their own market as GTA and other Ontario residents — especially sedulous Millennials and post-Millennials — continue to discover the historic but flourishing city?
Allan Drewlo, president of Drewlo Holdings, says professionals escaping high rents and mortgage payments are already moving to London.
“We’ve always seen a lot of international students and Canadian students from other regions.” he said, “But lately we have been seeing more professionals from the GTA and Western Canada move to London.”
A recent Statistics Canada study backs him up. London is the fifth fastest growing city in the country behind Peterborough, Kitchener-Waterloo, Ottawa, and Windsor.
Drewlo says rents in London will continue to increase, but “mainly because of the lack of supply, rising energy and operating costs, and increasing municipal taxes.”
And, vacancy rates (2.1% for 2018 from the Canada Mortgage & Housing Association) won’t improve, he said, “Unless there is a large amount of supply added to the rental market, I don’t see it changing in the next few years.
“Unfortunately, that much-needed supply of rental units is being hindered by several things including zoning approval delays by the municipality,” he said. “This is restricting supply and making it hard for everyone.”
On the mortgage side, London’s average price for a home was $415,200 in May, up 13.1% over May 2018’s price of $366,986, according to The Canadian Real Estate Association. Add in the stress test, and that’s a big number for a first-time buyer in London. But, that’s still a bargain for someone in Toronto with the May average cost of home at $794,800.
So, the municipality needs to take some quick steps to allow the building and development of more apartments and other rentals quickly or a weird phenomena will plague the city:
Londoners, — especially those in the market for their first homes and those who don’t have their housing nailed down — could be moving out. And, they will be making room for many more young professionals from the GTA — clamoring for an affordable place to live.