The Realtors® Association of Hamilton-Burlington is reporting a more “balanced” market for June 2022. They are reporting 995 sales throughout the region for the month. This is down 19.2% over May 2022 and down 37.8% over the same period last year. They are reporting 2,543 new listings for the month, which is down 3.3% month-over-month and up 27.1% over June 2021.
The balance we are seeing this month is confirmed when we look at the months of inventory. There were 2.6 months of inventory in June 2022 compared to 1.7 months of inventory in May. In a typical “Buyer’s Market,” we would expect to see 3 or more months of inventory.
Prices in the region are also moderating slightly. The average residential price in the RAHB area was $946,026. This is down 5% from May 2022, and up only 9% over last year.
The current market balance is a result of a combination of factors, but is primarily impacted by the Bank of Canada rate increases over the past several months.
Let’s take a closer look at some of the numbers for the month of June.
Hamilton Market Activity
|Months of Inventory||2.4||0.8||1.6|
|Median Days on Market||13.0||8.0||5.0|
|Average Days on Market||17.7||13.6||4.2|
Burlington Market Activity
|Months of Inventory||2.4||0.7||1.7|
|Median Days on Market||13.0||7.0||6.0|
|Average Days on Market||16.2||13.7||2.5|
Hamilton home sales were down 35.2% this month over 2021. There were 626 sales reported in Hamilton last month compared to 966 reported in June 2021. Burlington sales saw a similar decline. There were 198 sales reported last month compared to 325 in 2021. This is a decrease of 39.1%.
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Although new listings in the RAHB region were down month-over-month, Hamilton saw year-over-year growth in this sector. There were 1,497 new listings in Hamilton in June 2022, up 25% over June 2021 when there were 1,198. Burlington new listings were also up year-over-year from 425 in 2021 up 21.6% to 517 last month.
We saw a significant increase in active listings in both Hamilton and Burlington last month. Active listings were up 89.4% over last year from 748 to 1,485. In Burlington, active listings were up by 120.3% from 212 to 467.
Months of Inventory
As mentioned above, a typical “Buyer’s Market” would see 3+ months of inventory. In Hamilton, Months of inventory is up by 1.6 months from 0.8 last year to 2.4. Burlington’s months of inventory increased by similar margins from 0.7 in 2021 to 2.4 in June 2022.
Average Days on Market
A welcome sight for buyers, average days on market has increased in both Hamilton and Burlington. In Hamilton, the average days on market went up from 13.6 in 2021 to 17.7 in June 2022. Burlington’s average days on market is 16.2, up 2.5 days from 13.7 in 2021. This increase is positive for buyers, and still quite good for sellers compared to historical averages.
We are seeing prices begin to moderate from their peak earlier in the year, however, prices in Hamilton and Burlington are still slightly up year-over-year. In Hamilton, the average price for a residential home is up 9.6% year-over-year from $787,772 to $863,016. In Burlington, prices are up 9.9% over last year from $1,137,839 to $1,250,673.
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In the News
The Toronto Regional Real Estate Board reports the fourth consecutive month of declining sales, this month dropping 41% year-over-year. TRREB president, Kevin Crigger cites the aggressive mortgage interest rate increases combined with affordability challenges as the main reasons for the decline. Many buyers and sellers have decided to put their plans on hold in an attempt to wait out the market and see where prices land.
In June, consumer price inflation rose to 7.7%, a four-decade high. The average of core measures also rose to 4.73%, the highest its been since 1990. As the rate of increase exceeds expert predictions, there is more pressure than ever on both the Trudeau Government and the Bank of Canada to take immediate action to help Canadian households.
As a result of the intense inflation increases, economists are predicting a 75-basis-point increase from the Bank of Canada at their next Policy Meeting on July 13. This would bring the Bank of Canada Policy Rate to a total of 2.25%
A new report from the Canadian Mortgage and Housing Corporation says that Canada will need an additional 5.8 million new homes by 2030 to help improve housing affordability and ensure Canadians are not spending more than the recommended 40% of their disposable income on shelter. This number is over two times more than what was previously predicted. CMHC experts say there needs to be a drastic change in the Canadian housing sector to ramp up housing inventory.
Buying or selling real estate is a big decision. Make sure you have all the facts to make the best choices. Check out some of our helpful resources to guide you through your move:
- Mortgages 101: Different Mortgages in Canada and What They Mean
- What the Bank of Canada’s Hiked Interest Rates Mean for Canadian Homebuyers
- Real Estate Paperwork Explained: Essential Real Estate Forms and What They Mean
A Look at What’s to Come
We are certainly seeing more balance coming to the market this month, however, it still favours sellers. A typical Buyer’s Market would see over 3.0 months of inventory, while we are only hovering around 2.5 now. However, we also need to consider the seasonality of real estate. Summer is traditionally slower, and this balance is likely only temporary as we head into the busy fall market.
We encourage sellers to list now rather than wait as the rising interest rates will impact buyer budgets. The Bank of Canada is expected to hike the rates by another 0.75% this month, further affecting mortgage rates for Canadians. Pricing correctly and marketing is critical for sellers at the moment.
With rates still historically low, it’s buyers and sellers who are impacting the market, the biggest changes right now are psychological. The fundamentals of the current market have not changed. In fact, things could get worse as a supply shortage combined with record levels of immigration put more strain on the housing sector.
For buyers, there is a great window of opportunity to take advantage of a more balanced market. This is exactly what we have been waiting for: more inventory, less competition, and more time to consider and do your due diligence when looking at properties. However, this moderation is likely to be short-lived. The current market conditions are more psychological than anything else and buyers should take advantage of this temporary reprieve.