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| The Real Estate Market

Hamilton’s real estate market had a positive start to 2019, showing a solid rise in sales and sold prices throughout Hamilton proper. By the time spring was over, the impact of the new mortgage rules had worn off completely. The market picked back up again dramatically by July, and from then on, sales and average price points rose to much greater numbers, ending the year on a high note.

Overall, Hamilton saw a 2% increase in new listings and a 13% increase in sales. The average price of a home rose 6%, bringing it to $535,968. Active listings fell 1% to 1,079, and there were 1.5 months of inventory, down 0.2% from 2018. On average, listings spent 29.7 days on the market.

Hamilton’s outlying communities saw a softer increase in action; prices never dropped, but since their markets have higher price points, they saw a slower upswing. By the end of the year, things picked back up, and those more expensive suburban communities started gaining ground again.

Here’s a closer look at the area’s sales and sold prices:

Keep in mind the following statistics don’t reflect our current market very well and are averaged over the year. There was a dramatic difference between the first and second halves of 2019; if we isolated the second half, we would see a very different picture, with increased price growth and lower sales inventory.

 Number of SalesAverage Sale Price
Hamilton West670609$503,725$486,404
Hamilton East1,000878$503,725$371,074
Hamilton Centre1,5751,042$391,084$354,019
Hamilton Moutain2,0431,838$501,289$472,414
Stoney Creek1,2661,080$565,642$534,792
West Lincoln3437$719,592$610,927

How Did The New Mortgage Rules Impact The Market?

When the new mortgage rules were unveiled, we saw people gravitate towards more affordable real estate. When you look at the numbers in Hamilton proper, you’ll see the area did fairly well throughout the year because it had the most affordable options, with the market picking up the further we got into summer.

The Inventory Influence

After the release of the Fair Housing Plan and new mortgage rules, there was a dramatic increase in listing inventory, which was mostly fuelled by sellers who feared the impact of these new measures. We went from having a very low housing inventory in 2017 to suddenly having a very high inventory, especially in the higher price brackets and suburbs. Fewer buyers were looking to buy, though, as some thought the market would change in their favour (which it didn’t).

Then, in early summer, the impact of the mortgage rules started to wear off. Those buyers sitting on the sidelines jumped back into the market at great numbers and inventory began decreasing again. As the year progressed, new sales increased, new listings decreased, and active listings decreased as inventory shrank. Homes also spent fewer days on the market. We ended the year teetering on double-digit price growth and inventory levels that created 2017-like market conditions, not just in the $300K – $500K range, but in the higher price brackets and suburbs as well.

The Introduction of the First-Time Home Buyer Incentive

The Federal government launched the First-Time Home Buyer Incentive in 2019, providing buyers who have an annual income of up to $120,000 with 5 – 10% of a home’s purchase price for homes up to $560,000. With these restrictions, the Incentive didn’t quite help buyers looking in hot markets like Toronto and Vancouver, where the average price of a home is well above the $560,000 maximum. Overall, the Incentive didn’t have the impact many thought it would; we’ve noticed that many buyers aren’t discussing or taking advantage of it. We broke down the details of the Incentive in one of our previous posts here.

Interest Rates Held Steady

Since 2017, there have been five benchmark interest rate hikes, and many experts were predicting further raises in 2019. But instead, interest rates held steady at 1.75% throughout the year. The Bank of Canada was one of the only central banks that avoided an interest rate cut in 2019; experts say a resilient Canadian economy led to the hold, even as global economic concerns rose.

What’s Next for Hamilton?

First, let’s rip off the Band-Aid: We’ll be saying goodbye to the $300,000 home. A few years ago, the average entry-level price of a home in Hamilton was around $200,000. It then rose to $300,000, and it’s hovered there for the last little while. But by the end of 2020, $400,000 will be the entry-level price for a home in our area.

The city is continuing on its path of revitalization, with a number of new housing projects, restaurants, and downtown improvements. We surpassed our previous building permit record once again in 2019 as construction continues at unprecedented rates. Our local economy is on the up as well, with low unemployment rates, growing wages, and jobs slowly returning to the city. All in all, it’s a great time to be a Hamiltonian!

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