Home Prices Are Down 20% — Why Affordability Still Feels Out of Reach

The 20% Drop That Didn't Fix Affordability

If you've been following real estate headlines, you've probably seen the numbers: Canadian home prices have fallen roughly 20% from their 2022 peak, with some cities experiencing corrections of more than 30%.

Sounds like good news for buyers, right? So why do most Canadians — 55% according to recent data — still want prices to fall further?

The Math Behind the Frustration

Here's the uncomfortable truth: a 20% drop sounds dramatic until you remember that prices rose even faster before that. Today's prices have essentially returned to pre-pandemic levels — a time when housing affordability was already considered a crisis.

In Vancouver, housing costs still consume roughly 88% of household income. In Toronto, it's about 63%. These aren't sustainable numbers, and they help explain why 69% of Canadians aged 18 to 34 want prices to keep falling.

What This Means for London, Ontario

London occupies an interesting position in this conversation. We're not Vancouver or Toronto, but we've experienced our own version of the affordability squeeze.

The good news? London still offers genuine value compared to larger Ontario markets. A family home in Old North or Wortley Village — the kind of property that would cost well over $1.5 million in midtown Toronto — might be found in the $700,000 to $900,000 range here. Starter homes in areas like Oakridge or parts of Westmount can still be found in the $450,000 to $550,000 range.

The Real Issue: Income vs. Home Values

Canada's housing problem isn't just about prices. It's about the massive gap between what homes cost and what households actually earn.

This is why even a significant correction hasn't translated into a rush of confident buyers. First-time purchasers remain hesitant, worried that prices could keep falling. Meanwhile, the types of homes available don't always match what buyers actually want — particularly when it comes to condo inventory.

London's Advantage: Space and Lifestyle

What London offers that many larger markets can't is genuine livability at a more accessible price point. Consider what your housing dollar buys here:

- In Byron, you're minutes from Springbank Park and the Thames River trails - Near Western University, you have access to world-class education and healthcare - In Masonville, families enjoy established schools and convenient amenities - Throughout the city, you'll find actual yards, garages, and room to breathe

These aren't luxuries in London — they're standard features of home ownership.

Timing the Market vs. Finding Your Home

For buyers waiting on the sidelines, here's something to consider: even two-thirds of current homeowners say the recent price declines have been positive for the market. There's a growing recognition that the pandemic-era peaks weren't sustainable.

But waiting for the "perfect" bottom is a game few win. The right time to buy is when you find a home that works for your life, in a market you can afford, with financing that makes sense.

Let's Talk About Your Situation

Every buyer's circumstances are different. Whether you're a first-time purchaser trying to break into the market or a growing family looking to upsize, understanding where London fits in the broader affordability picture matters.

At Calford & Co. Real Estate Team, we help clients make informed decisions based on real market data and genuine local expertise.

Connect with Nickey Calford to discuss what today's market means for your home buying goals.