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“What that means basically is . . . demand is high for people who are looking to purchase new homes,” he said.

London’s rate of increase is well above the average Canadian rate, which rose by 0.2 per cent during the same period. Nationally, Ottawa led the pack with a year-over-year increase of 8.4 per cent, followed by Montreal at 6.8 per cent.

Toby Stolee, president of the London Home Builders’ Association, said he isn’t surprised by the latest figures for the region, which also takes in Strathroy, St. Thomas and portions of Middlesex and Elgin counties.

He said rising construction costs also are having an effect on local prices. Those costs are being driven by a shortage of construction trade workers and a busy U.S. construction market that is making materials more expensive.

Another factor is a low supply on the resale side of the market, which is making many buyers consider new homes instead, Stolee said.

“The resale market is very tight and those prices of resale homes have gone up significantly and the gap is closing,” he said.

The average resale price of a home in the region was $437,197 in January, according to the London and St. Thomas Association of Realtors.

Despite the higher prices, the demand for new homes is such that closing dates for properties valued at less than $600,000 are now going into next summer, said Sue Wastell, owner of Wastell Homes.

Homes “in that lower price point are getting scooped up very quickly,” she said, adding many buyers continue to come from the GTA.

Stolee anticipates prices of new homes will continue to go up in 2020.

“It’s always hard to predict, but if things continue to be as busy in terms of construction in the London area, but also in Ontario and even in the United States, that’s only going to drive prices up,” he said.

jjuha@postmedia.com

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