Hot Hamilton condo market outperforms detached home sales
20 percent more condos sold in September as sold in the same month in 2013
One sector of Hamilton-Burlington's hot housing market is outpacing even the region's overall record-breaking sales growth so far in 2014: Condos and townhouses. Twenty percent more condos were sold in September than in the same month last year.
And September wasn't an anomaly — condo sales have been up year-over-year all summer.
Consider that data collected by the Realtors Association of Hamilton and Burlington show condo sales (year over year) were up:
- 13 percent in August
- 23 percent in July
- 22 percent in June
Looking back at several months of data shows sales of condos in the region have gone up more this year than detached homes have, which have also been rising. The data suggests the hype from condo developers is not just about a housing style of the future, but one that is increasingly a popular option right now.
There were 235 condos sold in September, almost 20 percent more than the 196 sold in September, 2013. The median sale price this September was also higher than a year ago: $276,000 compared to $248,250 -- an 11 percent increase.
And those numbers, based on the region's database of resale homes, don't even count any of the newly constructed condos coming on the market.
"I think there was a pent-up demand for this type of product," said Ryan McLean, an agent who sells condos at City Square, a new development in the Durand neighbourhood.
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Developer Harry Stinson has staked the last few years on that demand. The developer moved to Hamilton from Toronto in 2008 to take advantage of what he saw as a underdeveloped condo market here. He converted the Stinson School to lofts, 16 of which are still for sale. He's tackling another school lofts project, the Gibson School, next.
It's a given that condo sale numbers appear to be increasing dramatically, Stinson said.
Upgrading to contemporary standards
"The statistics are definitely gong to look better simply because you're starting from such a low place," he said. "It isn't because all of a sudden condos became more popular. Up until very recently Hamilton condo inventory was, let's just say, not of contemporary standards."
Developers like Stinson are eager to be part of this major wave of changing that. Several proposed high and mid-rise projects are in various stages of city approval and construction.
Stanton Renaissance has proposed 260 units on the old James Street Baptist church site. Diamante Holdings is planning to build 106 condos at the old Tivoli Theatre, also on James Street. Developers Rudi Spallacci and Ted Valeri plan to build 700 units in phases at the Royal Connaught. Hi-Rise Ventures is building more than 100 units in 20 storeys in its Artizen project. Acclamation Lofts will bring 60 units, also to James Street north. More than 300 units will eventually be built at 150 Main.
Those are just a few examples. Trends like the year-over-year sales increases and city plans and incentives to build denser housing will surely draw even more condo development interest.
Stinson described a demographic difference in the homebuyers who are interested in his projects. The descriptors fit most of the common stereotypes of an urban dweller: Young professionals or downsizing retirees interested in walking to shops and restaurants.
And, unlike many major condo cities in Canada, they predominantly buy the condos to live in them, said Toronto-based real estate consultant Barry Lyon.
It means the market isn't quite "as exciting" with frenzied bidding over units that haven't even broken ground. But Lyon argued it's more sustainable.
"You don't get as quick sales," he said. "But I would argue it's better for the economy."
'The white picket fence in Ancaster'
Ryan McLean said there are just a handful of units left in City Square on Robinson Street. The developer, New Horizon, built another project a few years ago at Aberdeen and Dundurn. Sales took a little longer on that project, McLean said.
"It took a while for people to really believe that this was going to happen," he said. "There’s been some false starts for this type of product in Hamilton."
That a buyer would see a condo as not simply a last resort represents a new era in Hamilton real estate, Stinson said. And that means their real estate agent may need to change her preconceived notion about the urban neighbourhoods -- that all homebuyers would rather have a detached house if they could afford one.
"They're really not enamoured of the white picket fence in Ancaster," he said.
As Hamilton's condo market comes into its own, so might some of the surrounding real estate industry. For one thing, the online form where realtors list properties for sale isn't well set up for entering a condo versus a regular detached house, Stinson said. He said he's had to call the Realtors Association for help filling out and overriding certain computer fields.
It took a while for people to really believe that this was going to happen.- Condo developer Harry Stinson
"They're not even psyched up for it yet, " he said. "You can tell they're sort of regarding as a nuisance. They haven't quite gotten their minds around it."
Apart from the occasional new condo listed in the region's database of homes for sale, the Realtors Association numbers don't reflect the number of new condos that have sold. And no firm tracks that number, so it takes some extrapolating to trace how well new condos are selling.
For their part, Spallacci and Valeri said they've sold more than 60 percent of their first batch of units in the Royal Connaught. The project's first phase is 122 units.
"What we're experiencing on our project is exceeding our expectations," Spallacci said.
'It's not a fad'
The trend toward dense urban living certainly has the potential to change Hamilton's core.
Stinson said people stop by the Stinson School Lofts regularly and appear shocked that Stinson has been able to sell any of the condos. That speaks to a disconnect in expectation about what Hamilton should become, he said.
It's to be expected a developer would think so, but incentivizing and welcoming housing development is crucial to Hamilton's economy going forward, Stinson said.
"We delude ourselves that if we stand outside of U.S. Steel with a little sign that everything will change back to the 1940s," he said. "Housing is an industry, a long-term ongoing industry. It's not a fad."