Building Permits in London, Ontario Decline Amid Interest Rate Uncertainty

[Nomad]

In the first half of 2023, London City Hall, London, Ontario, experienced a notable decrease in issued building permits. The permits decreased by 15 percent as compared to the previous year. The 15 percent decline is actually $220 million decline in construction value. This drop is attributed to uncertainties surrounding interest rates. Higher interest rates have led to decreased demand for housing, making it less affordable for buyers.

Builders who struggled to meet high demand in the past are now cautious about large-scale residential projects, lest there will be no demand. Data from the London St. Thomas Association of Realtors indicates relatively unchanged home sale prices in July and August, with buyers adopting a wait-and-see approach amid anticipation of the Bank of Canada's decisions on interest rates.

Concerns arise as London city hall aims to meet its target of building 47,000 homes by 2031, set by the provincial government.

You can find the details here

 

[Winny]

The whole housing market is out of whack, even in Canada. If the interest rates are so high, why couldn't the city go back to the drawing board and lower the interest rates a tad bit? Could probably help increase the amount of property growth if they lowers the rate. At least I imagine it would.

Once prices goes down, maybe they will have some leeway into building those 47,000 homes by 2031.