London area real estate market stable in 2012

By Hank Daniszewski, The London Free Press

Wednesday, January 2, 2013 9:58:40 EST PM

New units continued to be built last year, like the houses pictured above. The only sector that varied widely from 2011 was in big projects, building-permit figures show. But the drop in institutional projects was partly offset by robust numbers for residential construction. (MIKE HENSEN The London Free Press)

The London-area real-estate market was stable in 2012, but the construction market will likely fall well short as some big institutional projects wind down.

The London and St. Thomas Association of Realtors (LSTAR) said 8,020 homes traded hands in 2012, 28 fewer than the 8,048 homes sold in 2011.

The December market reflected the rest of the year, with 381 sales — down slightly from 384 sales in December 2011.

“We expected the market to be stable and balanced without a whole lot of change and that’s what happened,” said LSTAR president Barb Whitney.

Whitney says economic blows, like the closing of London’s Electro-Motive Diesel plant in February, did not have much impact on the real-estate market. But stricter mortgage rules put a damper on high-priced homes later in the year.

“We are lucky in this market. We don’t get the big spikes or dips,” said Whitney.

She said steady improvement in the U.S. economy will eventually boost employment and the housing market in London.

Year-end City of London building-permit figures have not been released, but November numbers point to an overall decline.

In the first 11 months, the city issued about $748 million in permits, compared to $912 million in the same period in 2011.

The biggest decline came in institutional construction, with $70.3 million in permits issued. That’s down from $250 million in 2011.

In 2011, the city saw a range of big projects, including $40 million for the new Richard Ivey School of Business at Western University, $51 million for projects at the London Health Sciences Centre and $27 million for a new Catholic high school.

But the decline in institutional projects was partly offset in 2012 by solid improvement in residential construction. The city issued $235 million in single-family home permits, and $101 million for apartment construction in the first 11 months of the year.

That compares to $198 million in single-family home permits and $28 million in apartment permits issued by the end of November 2011.