For the first time ever, the average London house price is closing in on $300,000.

You can chalk that up partly to Toronto’s red-hot real estate market rubbing off on the London-St. Thomas area, says a housing analyst who expects the local price to break the $300,000 threshold by 2018.

Monied buyers, cashing out of the mega-city’s market and heading down the Highway 401 to London to snap up homes, where their dollars go much farther, aren’t exactly new to the area housing market.

But hearing it from an official voice, like Anthony Anthony Passarelli, an analyst with the Canada Mortgage and Housing Corp., puts a different complexion on the trend realtors have noticed for years.

Tuesday, Passarelli presented his annual market outlook forecast at a London conference organized by the London St. Thomas Association of Realtors.

He said London’s real estate market and new house starts came in higher than predicted this year and he expects the average price of a London home — including detached, duplex and condo properties — will surpass $300,000 by 2018.

Part of the reason is that Toronto’s empty nesters and young professionals are selling their homes and heading west.

The average price of a single-detached home in Toronto now tops $1 million, compared to $296,283 in London,

Passarelli said much of the evidence of the Toronto migration is anecdotal, but he says higher-priced homes in the local market — priced above $325,000 — sold better than low-cost homes this year, indicating more buyers are loaded with cash.

“Historically, the gap is getting wider. For Torontonians, especially those who want to retire, it is becoming a better proposition,” said Passarelli.

Thousands of Google searches on London real estate are known to be run each month from the Greater Toronto Area (GTA).

Benjamin DeLorey, a realtor with ReMax Advantage, said he agrees GTA buyers are becoming a bigger factor in the London market.

“Without question, I’ve had more contact with clients and customers from the GTA in 2016 compared to any other time during my 10-year career,” he said.

In August, DeLorey sold a condo in one of the downtown Renaissance towers to a young woman banking executive from Toronto.

At about $290,000, the condo was such a bargain she was able to keep her Toronto home as a rental.

DeLorey said he has a new listing for a detached home in west-end Byron that he’s confident will attract interest from Toronto buyers.

Stacey Dale, another agent with ReMax Advantage, just sold a home on Adelaide Street on Tuesday to a Toronto couple. She said the middle-aged couple had been renting in Toronto, but scooped up the modest but well-kept Adelaide home for just $160,000.

“They were priced out of the Toronto market. You can’t find anything under $300,000 in Toronto. They were shocked by what they could get for their money,” she said.

Mike Moffatt, a professor at the Ivey School of Business at Western University, said there are long-term technology trends helping to lure buyers to London’s lower-priced homes.

He said digital conferencing and fibre-optic connectivity allow entrepreneurs to base their business in London or surrounding communities, reducing the need to be in Toronto.

“We may no longer need to meet people face-to-face. That’s not as strange to my kids as it is to me, and as Toronto get more congested London or St. Thomas start looking pretty good,” he said.

He said transportation breakthroughs such as high-speed trains and driverless cars will make living in London and working in Toronto more feasible in future.

London-St. Thomas realtors are on track to beat their annual sales record of 9,738 homes set back in 2007.

Construction starts on new homes are also the highest in eight years.

Both resale and new home sales are running well above last year’s CMHC annual forecast.

Passarelli said an improving job market and home affordability in London-St. Thomas have been major factors in boosting the housing market.

He expects job growth will level off next year, but it won’t do much to dampen the seller’s market in London-St. Thomas because the supply of homes on the market will remain tight.

While selling homes has been easy, realtors are struggling to find new listings, with the number of homes on the market down about 30 per cent compared to last year.

Passarelli said that tight supply is unlikely to change much because of London’s aging population.

He said the number of people in London-St. Thomas aged 25 to 54 has been steadily declining and is now below 40 per cent.

People 55 years of age and above are settled and less likely to move out of their home and list it on the market.

The CMHC forecast also notes the housing market in the area is uneven.

North London is a seller’s market, with prices up about six per cent. But prices in east London and rural areas outside the city are only up about one to two per cent.

Passarelli said the condo market will remain strong, with prices increasing seven to eight per cent.

He said the growing number of one-person households and couples will continue to drive demand for condos.

CMHC resale homes forecast:

2016: 10,300 to 10,500 units

2017:10,250 to 10,650

2018: 10,000 to 10,600

Year-to-date average home price by area

North London:Up 8.2 per cent

South London: Up six per cent

East London: Up 1.7 per cent

St. Thomas: Up six per cent

Income needed to buy average resale home:

$55,500

hdaniszewski@postmedia.com

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