In its latest forecast for the London, Ontario real estate market, CMHC projects a balanced market for 2014 driven by the first-time buyer market of the Echo Boomer generation currently the age 19-31 demographic. First-time buyers typically drive any real estate market, as it allows older generations a buyer market for their homes so they can upgrade in their next home.
I agree with all of the assertions by CMHC for this market. London is also viewed as a destination city for retiring individuals due to the low cost of housing when compared to cites such as Toronto, and the availability of health care facilities, so that will spur demand as well.
The Echo Boomer generation is also referred to as the “we want it and we want it now” generation, so their expectations and demands in a home are a lot higher than their income can support. They typically seek to bypass the typical “starter home” and purchase a home similar to their parents’ existing home in a similar neighbourhood, perhaps a feat that took their parents many years to achieve. Alternatively they expect to travel less time to work, so are more likely to migrate downtown, which explains the current reshaping of the downtown core, with more high rise condo construction, allowing Echo Boomers better amenities at a reduced sticker price.
Overall with mortgage interest rates to remain stable in the short term, I believe the London market is positioned for a balanced market heading into 2014.