Hamilton house prices rising, but city still affordable compared to GTA, survey says
Market is expected to become more balanced in the third quarter of 2018
Home prices are still going up in Hamilton, but the city remains affordable compared to the GTA and is attracting first-time buyers, according to a Royal LePage survey published Tuesday.
The house price survey released by Royal LePage Tuesday states the overall price of a home in Hamilton rose by 6.1 per cent in the second quarter of 2018 to $541,778.
Despite that hike, the city continues to see people from the GTA migrating here. That's especially millennials who continue to move to the downtown core, Royal LePage broker Joe Farrente explained.
"Our region provides a lot of options for new homebuyers in the condominium segment, as prices remain affordable and developments continue to be built."
A breakdown of second quarter house prices shows the following:
- The median price of a two-storey home increased by 5.9 per cent to $571,330
- The median price of a bungalow increased by 7.6 per cent to $496,005
- The median price of a condominium increased by 0.8 per cent to $321,014
The sales for two-storey homes is "slower than usual," said Ferrante, but he's still seeing multiple offers on well-priced properties.
"The situation in Hamilton mirrors those across the country – the change in mortgage rules is requiring first-time buyers to rely more heavily on their families for financial assistance."
The new federal mortgage stress-test measures slowed the market to a standstill in much of the country.- Phil Soper, Royal LePage CEO
Moderate price increases are expected to continue into the third quarter, says the survey, but the market will be more balanced.
A balanced market typically means one that has four to six months of housing inventory, according to Mike Heddle, another Hamilton broker, but the city's market currently only has about two month's-worth of inventory.
"To me that illustrates quite a strong seller's market," he said.
The rising price for Hamilton is in contrast to the situation across the GTA which has seen year-over-year price drops.
'The spring that never blossomed'
Royal LePage CEO Phil Soper points to the government's new stress test as the culprit.
"It was a spring market that never blossomed," he said.
"The new federal mortgage stress-test measures slowed the market to a standstill in much of the country, as some families adjusted their expectations in a world with lower borrowing capacity, and others ... moved to the sidelines, adopting a 'wait and see what happens to home prices' approach."
Nationally, Royal LePage says the average price of a home in Canada during the second quarter rose by 2 per cent year-over-year to $613,968.
Heddle said he believes house prices in Hamilton and across the country will continue to rise in the next quarter.
"When you look at the underlying driving forces of the economy they're very strong - employment is up - unemployment down, income is rising in Hamilton."