• Population: 489,300 (Stats Canada 2009)
• A 1.5% employment growth is expected in 2010 and 2011.
• High unemployment rate
• Net migration to remain stable around 2,500 for 2010 and 2011.

London Mortgage Rates Will Slowly Increase in 2010.

The CMHC best case scenario, expect mortgage rates will continue to slowly increase in 2010 with a one year mortgage rate to be in the 3.6 to 4.8% range and the three and five year mortgage rates to be in the 4.2 to 6.7% range. In 2011, CMHC forecasts that the one year mortgage rate will be in the range of 5.0 to 6.0% whereas, the three and five year mortgage rate will be in the range of 5.6 to 7.2%. However, if the economy recovers at a faster rate than expected, mortgage rates may increase at a more rapid rate.

CMHC London area housing market

CMHC predicts a 5% increase in MLS sales in 2010, than easing in 2011. First time home buyers are expected to be impacted by increasing mortgage rates and rising prices. With the low mortgage rates experienced at the beginning of 2010, a large number of first time home buyers were brought into the market.

A balanced resale market will support modest price growth in 2010 and 2011. Resale prices will increase approximately 2% in 2010 and only 1% in 2011. Single starts will raise 9% in 2010, but decline in 2011 due to higher inventory costs. The average price of a single home will decrease nearly 3% in 2010 and is forecast to remain flat.

Unfortunately, the CMHC doesn't report on London specifically regarding the housing and mortgage market, however, we've included the closest surrounding areas.