Hamilton housing prices will keep driving locals away: CMHC
Housing prices are going up just as full-time jobs are going down. So people are moving out
As housing prices go up and full-time jobs go down, Hamiltonians are moving to outlying areas like Brantford, St. Catharines and Caledonia just to be able to afford a house. And a senior market analyst with the Canada Mortgage and Housing Corporation (CMHC) says that migration trend is only going to continue.
Abdul Kargbo, speaking at a National Housing Day event Friday, said Hamilton houses will only get less affordable in the coming years. And that comes just as there are fewer full-time jobs here.
The market for the Hamilton-Burlington-Grimsby area is overheated — meaning wages and employment rates aren't keeping up with housing prices — and the CMHC red-flagged it as problematic this year. That's not about to change, Kargbo said.
Meanwhile, the price gap between a house in Toronto and Hamilton will only keep widening, which is driving more Torontonians here, he said during a presentation at National Housing Day Friday. In 2001, for example, there was a $79,081 difference between a house in Toronto versus a house in Hamilton. In 2016 so far, that number is $228,577.
As long as that disparity keeps widening — and it will, he said— Hamilton's housing prices will trend upward, even if its employment rates trend downward.
- Hamilton homebuyers priced out — moving to Brantford, St. Catharines: CMHC
- Average Canadian home sold in October for $481,994, up 5.9% from year ago
Hamilton has had a hot housing market in recent years. In the last year alone, the price of an existing home in Hamilton has increased by about 14 per cent. Last year, the average price of an existing home was $447,000. As of September this year, that price is about $511,000.
In contrast, the average price of a home sold in Brantford last month was $366,310, according to the Brantford Regional Real Estate Association.
Some call Hamilton's rising housing prices a mere correction after years of being undervalued. Local affordable housing advocates are sounding the alarm though, saying it's hard for people with lower wages and precarious employment to enter the market.
That's still the case, Kargbo said Friday, which will mean a "huge imbalance" in the coming years.
"You'll see, as we're beginning to see now, average Hamilton folks — particularly first-time home buyers — leaving Hamilton because they're priced out."
That's not news to Renee Wetselaar, director of the Affordable Housing Flagship.
When you match up precarious employment and stagnating wages with housing prices, "there's a real disconnect between the two pieces," she said.
That's why it's more important than ever to have the conversation at National Housing Day, she said. The focus was on how to have neighbourhoods with people with a mix of incomes.
"We can't have any more urban sprawl," she said. "People are going to need to think deeply about what we need to do to have more balanced neighbourhoods."
With files from Mahnoor Yawar