The Realtors® Association of Hamilton-Burlington reported the second year in a row of declining sales with 11% fewer sales across the region in 2023. Sales are also down 30% from the long-term trends for the area.
In December, there were 438 sales in Hamilton-Burlington, down 8.9% over last year. New listings were down 19.2% year-over-year and inventory was up 15.1% with 1,902 new listings coming to the market.
According to RAHB president, Nicolas von Bredow, lending rates are at a two-decade high and the pressure is weighing on housing demand. According to Bredow, higher priced-detached and semi-detached properties were the “primary drivers of sales declines.” Sales of homes priced $600,000 or below actually improved in 2023, but this segment only represents about 20% of the market.
The average price in Hamilton-Burlington in December was $822,709, which is up 2.2% year-over-year.
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Let’s take a closer look at what happened in the local real estate market last month:
Hamilton Market Activity
| Variable | 2023 | Difference |
|---|---|---|
| Sales Activity | 296 | 0.7% |
| New Listings | 309 | -12.7% |
| Active Listings | 1,179 | 15.9% |
| Months of Inventory | 4.0 | 15.1% |
| Average Price | $760,376 | 1.2% |
| Median Price | $708,500 | 3.1% |
| Average Days on Market | 38.9 | 11.9% |
Burlington Market Activity
| Variable | 2023 | Difference |
|---|---|---|
| Sales Activity | 98 | -7.5% |
| New Listings | 296 | -37.3% |
| Active Listings | 296 | 12.5% |
| Months of Inventory | 3.0 | 21.7% |
| Average Price | $1,049,699 | 2.7% |
| Median Price | $941,750 | 10.8% |
| Average Days on Market | 40 | 15.8% |
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Sales Activity
There were 296 sales in Hamilton last month, down 0.7% over last year. Burlington had 98 sales in December, which was down 7.5% year-over-year.
New Listings
There were 309 new listings in Hamilton last month, which was down 12.7% over 2022. There were 74 new listings in Burlington in December, down 37.3% over the previous year. Inventory in Burlington was up 12.5% with 296 active listings.
Active Listings
Active listings, also known as inventory was up 15.9% year-over-year in Hamilton last month with 1,179 active listings. Inventory in Burlington was up 12.5% over the previous year with 296 active listings.
Months of Inventory
Months of supply, or months of inventory is often used to determine market conditions. Anything above 3 months of inventory is often considered a “buyer’s market.” In Hamilton, months of supply increased 15.1% over December 2022 resting at 4.0 months. Burlington also saw an increase of 21.7% with 3.0 months of supply.
Average Days on Market
The average days on market in Hamilton went up 11.9% over 2022 with homes staying on the market for an average of 38.9 days. Burlington days on market increased 15.8% with homes staying on the market for 40.1 days on average.
Average Prices
Prices in Hamilton were up 1.2% year-over-year. The average residential price in Hamilton was $760,375 in December 2023. In Burlington, average prices were up 2.7% over the previous year, resting at $1,049,699 in December 2023.
In the News
After holding interest rates for its third consecutive month in December, Bank of Canada Governor Tiff Macklem says the bank will likely begin cutting rates again in 2024. Although the BOC has previously said it would be prepared to hike again should inflation not improve, Macklem said he could foresee cuts happening after “several months of sustained downward momentum in core inflation.”
Market experts are currently reporting a downward trend in five-year fixed mortgage rates as a result of a drop in government bond yields. According to some experts, the downward trend is likely to continue in 2024 with potential interest rate cuts. However, despite fixed and variable interest rate decreases, affordability will continue to be an issue for Canadians.
A report from Statistics Canada showed Canada’s population growth accelerated to 3.2% in 2023, one of the fastest rates in the world. The population grew by 1.25 million between January and October 1, the largest increase since confederation in 1867. The growth is primarily driven by temporary foreign workers and international students.
A bill that would lift GST charges from the development of rental properties has passed in the Senate and will likely become law. This new legislation was designed to incentivize developers to build more purpose-built rentals, a housing segment that is in short supply. The bill would also amend competition law by giving new powers to the Competition Bureau.
The Toronto Regional Real Estate Board released year-end figures showing a 13-year low in home sales. There were 65,982 home sales in Toronto in 2023, which is down 12% over 2022 and a significant 45.7% down since the peak of the market in 2021. Higher borrowing costs remain the primary driver for this.
A Look at What’s to Come
As we enter 2024, we will see the market slowly wake up and pick up momentum over the course of the year. With interest rates expected to go down, many experts forecast home prices to rise again and reach pandemic levels by year-end.
The consensus among market experts is almost unanimous that the Bank of Canada’s rate hiking cycle is over. Now the attention turns to decreases. Canadians are wondering when, and by how much? Many economists are predicting rates coming down as early as February with a decline of 1-2% over the course of the year.
If this happens, it will re-ignite real estate sales activity, resulting in price increases. Supply and demand continues to put pressure on the market and the only thing preventing the market from exploading right now is the persistent high interest rates and mortgage stress test. With rate increases on hold and poised to decrease in 2024, sidelined buyers and investors will return to the market and resume activity. You can already see signs of this happening in stock markets over the past several months.
The battle over inflation appears to be won. With markets stabilizing, we can already feel activity picking up. Even in our office, December activity saw an uptick with more showings, more inquiries, and market sentiment improving significantly. Overall, 2024 should be a fairly positive year for the real estate market in Canada.
Are you thinking about making a real estate move in the near future? Call us at 1-844-484-SOLD or email us here for everything you need to know about buying and selling in this market.
