Is Hamilton's housing market at risk of overheating?
Hamilton sole city out of 15 listed where demand is outpacing supply
Hamilton is the only housing market out of 15 measured by the Canada Mortgage and Housing Corporation (CMHC) that is at risk of overheating, according a new report.
But it's only showing moderate evidence, and employment in the city is still trending upward.
A new CMHC report shows that while overbuilding or overvaluation is a problem is most other centres, Hamilton's housing market is the only place the CMHC identifies as having moderate evidence of "overheating" — where demand is outpacing supply.
Hamilton's housing market isn't showing signs of slowing. A record number of homes were sold last month, according to numbers from the Realtors Association of Hamilton-Burlington.
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Sales were 17.6 per cent higher than the 10-year average for December. The 802 properties sold were an all-time December record.
The median and average home prices were up about 9 per cent last month compared to December prices in 2014.
While Hamilton is the only city listed where demand is outpacing supply, it has so far avoided problematic conditions related to price acceleration, overbuilding, overvaluation and overall assessment, the CMHC says.
Overvaluation and overbuilding are the most prevalent problematic conditions the housing corporation found elsewhere, with overvaluation detected in eight centres and overbuilding in seven centres.
"The evidence of overbuilding has increased since the previous assessment in Calgary, Saskatoon, Regina, and Ottawa due to either higher vacancy rates, high inventory of new and unsold units, or a combination of both," said Bob Dugan, CMHC's Chief Economist in a statement. "As more centres are now showing problematic overbuilding conditions, inventory management is becoming more important."
Down the QEW in Toronto, that city is facing problems with price acceleration and overvaluation.
"We are also monitoring for the potential emergence of overbuilding in Toronto due to the high number of condominium units under construction," the CMHC report says. "Inventory management therefore continues to be necessary to make sure that these condominium units under construction do not remain unsold upon completion."
Hamilton has nowhere near Toronto's condo penetration, but several condo projects are slated to finish in the next few years.
Here are their timelines, according to the city's planning department:
- Acclamation, James Street North: 71 units. Expected to start construction early 2016, and finish in 2017.
- 150 Main West: 142 condo units. Began construction in 2015. Expected to finish construction in the second quarter of 2016.
- Royal Connaught, King Street East: Began construction on first and second phases (of five planned total phases) in 2015. Expected to finish those phases in late 2016 with occupancy in 2017.
- Beasley Park Towns, Wilson Street: six units. Expected to finish construction in 2016.
- Vista, Charlton Street East: 152 units. A big sign went at the site formerly used as a bowling alley and transportation depot in the fall. Construction is expected to start early 2016, wrapping up mid-2017.
- The Connolly, James Street South: 259 units on the site of a Baptist church. Expected to begin construction in the last quarter of 2016 and finish mid-2018.