The Realtors® Association of Hamilton-Burlington (RAHB) reports a year marked by adjustment in housing demand. Sales in the area were down by about 30% over the record highs that were seen in 2021. Average prices in the area are also down, however, it’s important to note that prices are only down from the peak of the market. And in fact, prices are still up 16% compared to pre-pandemic levels. 

RAHB Lou Piriano says the real estate market spurred by the pandemic caused growth that “exceeded expectations” over a two-year period. In 2022, he says the conditions started to shift back to a more balanced market. According to Piriano, the current market, political factors, and interest rates could “start to support a more stable market for the foreseeable future.” 

Buyer’s market vs. seller’s market. What does it all mean? Learn about the differences between the two in this post here.

Let’s take a closer look at what happened in the local real estate market last month:

Hamilton Market Activity

Variable2022Difference
Sales Activity284-42.6%
New Listings350-12.5
Active Listings960430.4%
Months of Inventory3.4824.4%
Average Price $750,601-14.6%
Median Price$690,000-16.9%
Average Days on Market34.3154%

Burlington Market Activity

Variable2022Difference
Sales Activity9826.3%
New Listings1177.3%
Active Listings257446.8%
Months of Inventory2.6642.1%
Average Price $1,039,940-14%
Median Price$857,500-23.8%
Average Days on Market33.9156.3%

Sales Activity 

There were 284 sales in Hamilton last month, down 42.6% over December of 2021. In Burlington, there were 98 sales, representing a decline of 26.3% year-over-year. December is normally a slow month for sales, however, external factors such as rising interest rates likely played a role in these numbers. 

Check out our past real estate market reports right here.

New Listings

There were 350 new listings in Hamilton in December 2022, which was down 12.5%. Burlington had 117 new listings last month, which was up 7.3% year-over-year. 

Active Listings

Active listings, sometimes called “Inventory” was up in both Hamilton and Burlington. In Hamilton, December 2022 inventory was up 430.4% to 960 listings. Burlington inventory was up 446.8% to 257 listings. 

Months of Inventory

Months of inventory or months of supply is often used to determine market types. Months of supply in Hamilton was up 824.4% to 3.4. In Burlington, months of inventory was at 2.6, which is up 624.1% year-over-year. This indicates a balanced/buyer’s market. 

Average Days on Market

A slower market results in longer average days on market. In Hamilton, the average days on market was 34.3 year-over-year–up 154% over last year. Burlington days on market were up 156.3%, up to 33.9 days. 

Average Prices

Residential prices in the area were also down year-over-year by 14.6% to $750,601. Burlington prices are also down by about 14%, resting at $1,039,940.

In the News

The Toronto housing market saw a record annual price drop last month. According to the Toronto Regional Real Estate Board (TRREB), the benchmark price in the city was down 8.9% in December 2022. Prices are also down about 19% since March of 2022. Sales in Toronto were down 48% over last year. However, despite this, many experts do expect to see the market stabilize in 2023, potentially signaling the bottom of this current market cycle. 

When it comes to the principal residence tax exemption, there might be some fine print you are missing! Many Canadians believe that selling your principal residence is not subject to capital gains, and therefore, will not be taxed. However, in reality, the exemption works more as a guideline. There will always be tax, but the exemption comes into play if you meet certain variables, and will dictate how much tax can be sheltered.

Canada’s foreign buyer ban came into effect this month which prevents foreign enterprises and individuals outside of Canada from buying properties in the country. The ban was proposed in the summer of 2022 and will last for two years. However, there are some exceptions to the ban including exceptions for those with temporary work permits, refugee claimants, and some international students. Non-Canadians with a spouse who is a citizen are also exempt, and the ban does not apply to permanent residents or those intending to rent. 

The Office of the Superintendent of Financial Institutions (OFSI), Canada’s banking regulator, has decided to keep its qualifying rate for uninsured mortgages despite the rising interest rates of the past year. OFSI says they will continue to be “prudent” that borrowers continue to be tested. They say the minimum qualifying rate (MQR) will continue to be an important tool in mortgage underwriting.

A Look at What’s to Come

With rising interest rates and political factors such as the newest immigration targets, foreign buyer ban, and vacancy taxes, many experts believe that the market is headed toward stability in 2023. Although more interest rate hikes are expected, it would appear that the Bank of Canada’s tightening cycle is nearing an end. 

With the pandemic behind us, some are expecting a return to normalcy, however, it’s unclear what the long-term lasting effects on the economy will be. While market insights are currently reporting low numbers, it’s important to remember the pre-pandemic market. 

There is still an opportunity for sellers to capitalize on high sales prices. The current average prices in the area are still 16% higher than pre-pandemic values, and with the right pricing and marketing strategies, quick and profitable sales are still possible. 

Although buyers are facing greater barriers to purchasing, demand is still there. We would encourage them to consider all costs when purchasing a home. Although interest rates are higher, lower property values will help provide savings elsewhere in the transaction. 

Are you thinking about buying a new home or selling your property in the near future? Call us at 1-844-484-SOLD or email us here to get started.