The Realtors® Association of Hamilton-Burlington (RAHB) reported 1,232 residential sales in the region for May 2022. This is down 5.1% over the previous month and down 31.9% over May of 2021. Inventory was up by 7.3% month-over-month with 2,631 new listings in the area. This is also up 16% over last year.
Average prices in the Hamilton-Burlington area are below the $1 million mark this month, down 1.7% over last month to $995,408. However, this slight moderation is still up 17.6% over last year.
The market is softening slightly from its winter peak and with rising interest rates, we should continue to see a moderation in the market. Although we are still in a strong ‘Seller’s Market’, this slight cooling is a welcome sign for many buyers.
What’s the difference between a Buyer’s Market and a Seller’s Market? Find out in our blog right here.
Let’s take a closer look at what happened in the local real estate market last month:
Hamilton Market Activity
|Months of Inventory||1.7||0.8||0.9|
|Median Days on Market||10.0||8.0||2.0|
|Average Days on Market||14.4||12.5||2.0|
Burlington Market Activity
|Months of Inventory||1.3||0.6||0.7|
|Median Days on Market||11.0||7.0||4.0|
|Average Days on Market||13.5||10.8||2.7|
Sales activity in Hamilton was down 35.3% year-over-year. There were 732 sales in May 2022 compared to 1,132 in May 2021. Burlington reported 291 sales in May 2022, down 23% compared to the 378 reported in May 2021.
Looking for the perfect Burlington home for sale? Check out our Burlington real estate page right here for everything you need to know.
Inventory across the region is up over last year. In Hamilton, there were 1,617 new listings in May 2022, up 12.4% over last year when there were 1,438. Burlington reported an increase of 23.6% over last year with 540 new listings in May 2022 compared to 437 in 2021.
We are also seeing an increase in active listings in Hamilton of about 43.7%. In May 2022 there were 1,259 active listings compared to 876 in 2021. Burlington saw even greater gains in this regard with 376 active listings compared to 222 in 2021. This is an increase of 69.4%.
Months of Inventory
Months of inventory is also increasing and trending toward a more balanced market. Traditionally, a balanced or ‘Buyer’s Market’ would see 3-4 months of inventory. In Hamilton, months of inventory is up by 0.9 over last year from 0.8 to 1.7 in May 2022. Burlington saw similar gains, increasing from 0.6 months of inventory in 2021 to 1.3 in May 2022.
Average Days on Market
The market is slightly moving away from the rapid-fire, extreme conditions we saw during the pandemic. Average days on market in Hamilton is up by 2 days over last year from 12.5 to 14.4. Burlington had a similar increase over last year from 10.8 days of market in 2021 to 13.5 days on market in 2022, an increase of 2.7 days.
Although prices in the region are moderating from their peak in the winter months, we are still seeing increases year-over-year. In Hamilton, the average price was up 13.5% over last year from $794,555 in May 2021 to $901,535 this year. Burlington saw greater gains with the average price increasing 23.3% year-over-year from $998,620 to $1,231,174.
In the News
At its most recent policy meeting, the Bank of Canada made the move to raise its Policy Rate by another 50 basis points to help stifle rising inflation. This brings the total Policy Rate to 1.5%. The bank has also hinted at more rate hikes coming at subsequent policy meetings, stating that aggressive action is needed to help cool record levels of inflation. More increases are expected at the next meeting in July.
The federal budget was released last month. What was in it? How will it impact Canadian families? Read our summary of the federal budget and how it impacts homeowners here.
A recent article in The Globe and Mail reported that the bank is signaling that it may need to increase the rate to at least 3% in order to curb consumer prices and ensure inflation targets are met. This is notable because the central bank typically only raises interest rates by 25 basis points. Fifty basis point increases are a decidedly aggressive move that the bank hopes will result in more confidence from Canadian consumers.
As interest rates continue to rise, experts worry that mortgage affordability will become a greater issue for Canadians. The Globe and Mail are also reporting that monthly mortgage payments on an average Canadian home have gone up by about $800 between October and April.
Many experts are reminded of the double-digit interest rates seen in the late 1980s and early 1990s. However, most experts say that is not the issue at hand in 2022. The main problem here is the rate of increase and the record-high home prices. Experts say that if prices correct quickly, it might offset the affordability issues created by higher rates.
How will the Bank of Canada interest rates impact you? Read our blog about everything you need to know about the interest rate hikes here.
Doug Ford’s Provincial Progressive Conservative government was re-elected for a second term at the 2022 election earlier this month. The PC government achieved a majority government with the New Democratic Party (NDP) acting as the official opposition. Both NDP leader Andrea Horwath and Liberal Party leader Steven Del Duca have announced stepping down after the election.
Hamilton’s industrial waterfront will be getting a facelift. The prime waterfront land owned by Stelco has been sold to Slate Asset Management. The $518-million deal will result in over 800 acres of industrial, formerly steelmaking land transformed into a commercial district. A new report by Ernst & Young stated that this revitalization could create up to 23,000 jobs and inject $3.8 billion into the provincial economy.
A Look at What’s to Come
Sales and home prices are moderating from their winter peak, however, the market remains strong and firmly in a ‘Seller’s Market.’ The Bank of Canada continues along its path to bring interest rates back up to pre-pandemic levels, which is expected as the low rate was an emergency measure that was never meant to remain.
Factors such as supply shortage and record-high immigration demand 20-years in the making created extreme market conditions that are rightfully correcting themselves now. The Bank of Canada is signaling an increase of rates back up to 2.5-3% by the end of the year, which is double the current rate, but still low by historical standards.
Average prices are also beginning to soften in some areas, although the minor savings are offset by higher rates. Buyers would be wise to enter the market now and take advantage of increased inventory and a moderate market. Affordability will only go down as rates go up, and they may find that what they could afford today is not feasible in a few months. Now is not the time to wait.
Are you entering the real estate market this year? Find out everything you need to know about types of Canadian mortgages here.
If you’re thinking of selling in the next year or so, now is the best time do to so. Interest rates are set to increase further, which will decrease buyer budgets. The market conditions we experienced from December 2021 to March 2022 will not return, which means now is the time to sell if you wish to receive top dollar.
Are you thinking about making a real estate move in the near future? Consider hiring a real estate agent in Hamilton. Call us at 1-844-484-SOLD or email us here for everything you need to know about buying and selling in this market.