Buyers’ market takes hold in Southwestern Ontario – but can first-timers cash in?

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After a few years in balanced territory, Southwestern Ontario’s housing market is firmly turning right into a patrons’ one

Printed Jun 13, 2025 • Final up to date 6 minutes in the past • 3 minute learn

Desjardin economist Kari Norman speaks at this yr’s Southwestern Ontario Actual Property Discussion board that was held at London’s RBC Place on Thursday, June 12, 2025. (Jonathan Juha/The London Free Press)

Southwestern Ontario’s housing market, together with London’s, is shifting decisively into patrons’ territory within the second half of 2025, a Desjardins economist mentioned on the Southwestern Ontario Actual Property Discussion board on Thursday.

After a few years in balanced territory, the area is seeing falling demand and rising provide – a mixture that favours patrons, economist Kari Norman advised a packed room at London’s RBC Place.

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The commerce warfare between Canada and the U.S. has dampened shopper confidence at a time when listings proceed to pile as much as ranges not seen in years.

“Truthfully, in case you’re unsure you’re going to have a job on the finish of the summer season or the yr, this isn’t the time you’re going to tackle a half-a-million or million-dollar mortgage,” Norman mentioned.

A patrons’ market is outlined as one the place the sales-to-new listings ratio – the variety of properties offered in comparison with new listings – drops under 40 per cent. This offers patrons extra selection and negotiating energy, usually driving down costs. A sellers’ market options extra patrons than listings, whereas a balanced market sits in between.

London’s housing market has already been displaying indicators of weakening. House gross sales from January to Might have been down 17.5 per cent from final yr – and 36.1 per cent under 2022 ranges – in response to the London and St. Thomas Affiliation of Realtors (LSTAR).

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However the market remained above the 40 per cent threshold till Might, when the year-to-date ratio dropped to 39.3 per cent for the primary time in years.

“Trying particularly at among the main centres in Southwestern Ontario, each single one is in a patrons’ market proper now,” Norman mentioned.

“There’s deteriorating shopper sentiment, commerce uncertainty and decrease inhabitants progress affecting demand. On the availability facet, now we have a rising variety of new listings and unsold models. That’s going to be a problem for the remainder of the yr.”

Norman mentioned whereas Canada is headed for a “delicate recession” in 2025, any financial or housing restoration will possible be gradual.

Robert Hogue, an economist with RBC, agreed. Whereas some markets present indicators of revival, a full rebound might take time.

“Our greatest guess proper now could be that markets, in the event that they’re not on the backside of this correction, are very near it. Going ahead, they need to begin to decide up slightly bit,” he mentioned.

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“However I’m not suggesting a pointy rebound. Affordability continues to be a priority, as are broader financial and labour market points. Any restoration can be gradual.”

Although a patrons’ market might convey costs down, affordability will nonetheless be a problem for a lot of, particularly younger patrons, Norman mentioned. House costs have risen a lot sooner than wages lately.

“It’s taking longer and longer for younger adults to save lots of for a down fee,” she mentioned. “In the meantime, they’re renting and hire inflation has skyrocketed – in order that they’re saving for a shifting goal.”

At present costs – the common resale worth within the London space was $656,432 in Might – mortgage funds would take up greater than 30 per cent of the common earnings in Southwestern Ontario, in response to Norman.

“No single-family residence or indifferent house is inexpensive in any of the most important centres in Southwestern Ontario,” Norman mentioned. “Even townhouses and condos are unaffordable in lots of markets.

“We’re not going again to pre-COVID ranges of affordability. It’s bettering however we haven’t mounted the issue.”

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