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Talk about summer doldrums.
In what’s shaping up as one of the London region’s slowest years for home sales, the local market saw one of its worst Augusts in recent history, new London and St. Thomas Association of Realtors (LSTAR) figures show.
In total, 577 homes were sold in the region last month, six per cent fewer than the same month last year, LSTAR reported Wednesday.
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The average sale price of local properties also dropped, by almost four per cent, to $629,500.
Kathy Amess, the association’s chair for 2024, tried to strike a positive tone, pointing to a 19 per cent increase in listings from last August.
“Despite the fluctuations in sales activity, average price and dollar volume, the increase in new and active listings indicates a more balanced market, providing more opportunities for buyers and sellers alike,” Amess said in a release. She didn’t respond to a request for comment by press time.
August’s lacklustre numbers follow a new report by realty giant RE/MAX that included London as one of a handful of markets in Canada where home prices are expected to grow only marginally or decline in 2024, even if interest rates keep coming down.
On Wednesday, the Bank of Canada announced it was cutting its key lending rate for the third time this year, by a quarter of a percentage point.
Governor Tiff Macklem said the decision to cut the key lending rate to 4.25 per cent was motivated once again by continued progress on inflation and the need for growth to pick up again.
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While the announcement came as no surprise, Macklem signalled a willingness to change the pace of cuts, if circumstances warrant.
“If those upward forces in inflation proved to be stronger than we expected, or if there’s significantly less slack in the economy than we assess, yes, it might be appropriate to slow the pace of declines,” he said.
“On the other hand, if the economy was significantly weaker, if inflation was significantly weaker than we expected, yes, it could be appropriate to take a bigger step, something bigger than 25 basis points.”
Looking ahead, Macklem reiterated that if inflation keeps easing as expected, it is “reasonable” to expect more rate cuts.
Forecasters anticipate that will mean rate cuts in October and December, the last two decision meetings this year.
The previous two cuts have done little to spur home sales in the London area, which includes Strathroy, St. Thomas and parts of Middlesex and Elgin counties.
But Amess expressed some optimism this could change in coming months if the central bank stays the course.
“With the Bank of Canada lowering its key interest rate to 4.25 per cent today, we anticipate a potential boost in market activity as borrowing costs decrease,” she said in the release.
With files from The Canadian Press
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