Hamilton housing market trends have seen a significant change in the past few months. Starting with the Bank of Canada’s recent policy rate increases, we’ve been hearing about a shift in the market ever since.
Interest rates are going up across the country, so it’s not just Hamilton homeowners that are impacted here. However, coming out of the pandemic, we’re headed towards uncharted territory and new Hamilton real estate trends after two years of lockdowns and COVID-19 interest rates.
Here are some Hamilton housing market trends to watch:
Will Hamilton Home Prices Go Down?
In the past couple of years, we have seen astronomical price increases throughout the Hamilton market. It was common to see Hamilton housing price trends go up 20-30% year-over-year in some cases. Month-over-month, we often also saw incredible price increases. However, these increases have appeared to slow down slightly in recent months.
Rising interest rates have slightly cooled the market and although we do not predict prices to drop significantly anytime soon, we will see some moderation and the rate of increase slow down.
For example, in early 2022 we saw the average price of a home in Hamilton-Burlington go past the $1 million mark. In May 2022, the average price was slightly down month-over-month by 1.7% to $995,408. However, that was still up 17.6% over May 2021.
Most experts are predicting that prices will continue to rise slightly in 2022 and 2023, but not at the same pace as we saw in 2021.
Thinking about buying a home in the Hamilton area this year? Check out some of the areas we serve below:
How Will Rising Interest Rates Impact the Hamilton Housing Market?
Since March 2022, the Bank of Canada has introduced several new Policy Rate increases. As of writing, the Policy Rate sits at 1.5%. This is a big change from the 0.25% rate we experienced throughout the pandemic.
It’s important to remember that 1.5% is still lower than the Policy Rate of 1.75% in 2019. Rates are still historically low, and even with planned hikes coming in July and September, we expect them to remain low compared to rates we’ve seen in the 80s and 90s.
However, as rates go up, buyer’s budgets will go down. Higher rates will have a big impact on how much buyers are eligible to borrow, and will, therefore, play a big role in the types of homes they can buy.
Housing affordability will continue to be a hot issue, and homes with secondary suites or other income potential will continue to be popular among buyers looking to improve and increase their budgets.
Will There Be More Housing Inventory in Hamilton?
As interest rates rise and buyer budgets shrink, sellers will be motivated to sell their homes quickly to take advantage of higher prices. The low Hamilton housing inventory that persisted throughout 2021 should see a spike in the fall market. However, sellers should expect a very different selling climate from what we saw in 2021.
Is Hamilton Heading For a Buyer’s Market?
With housing inventory slightly increasing (new listings were up 16% year-over-year in Hamilton in May), and prices slightly cooling, many experts thought this could show promise of a Buyer’s Market on the horizon.
In our opinion, the shift is not strong enough to usher in a true Buyer’s Market. We are still very much in a Seller’s Market, however, a slightly softer one than we saw last year.
A slight increase in inventory and moderating prices is a welcome sight for buyers who were dealing with a hyper-competitive Seller’s Market this past year. Right now, it would appear we are just in a regular Seller’s Market or a balanced market.
Want to learn more about the difference between a Buyer’s Market and a Seller’s Market? Read our blog about it here.
What Do These Hamilton Real Estate Trends Mean for Buyers and Sellers?
For sellers, these trends could result in their homes spending more time on the market, receiving fewer offers, and even conditional offers in some cases. Many homes are still selling above the listing price, but the competition, multiple offers, and bidding wars we saw last year are starting to cool down.
Buyers, on the other hand, will have more choices and can be more strategic with their offers. More time on the market means they will have the chance to see more properties and not feel pressure to submit offers sight unseen or with minimal conditions.
Thinking about buying or selling in this market? Check out some of our resources to help you on the way:
- Sold Over Asking: What it Means and Why Does it Happen?
- Real Estate Paperwork Explained
- Mortgages Explained: What Do the Different Types of Mortgages Mean
- What You Need to Know About Buying a House Sight Unseen
Who is Buying in Hamilton?
In recent years, Hamilton has become a popular city for first-time buyers priced out of the Toronto market. With great amenities, proximity to other parts of the GTA, and a strong economy, Hamilton is a popular choice for buyers looking to get more for less.
Recent Hamilton housing price trends have made the city slightly less affordable to some, but compared to the prices in Toronto, Hamilton is still a great prospect for relatively affordable, high-quality homes.
Another factor in the Hamilton housing market is immigration. With record numbers of new Canadians entering the country, low housing inventory remains an issue that will likely persist well into the fall of 2022 and 2023.
Luxury real estate is also popular in Hamilton. As prices increase, the definition of luxury is absolutely changing, however, Hamilton remains a great location for those looking for traditionally luxe homes with ample space, privacy, and high-end features.
Buying or selling luxury homes in Hamilton is a different ballgame. Read about finding a luxury Hamilton real estate agent here.
New Construction Projects in Hamilton
Hamilton is currently in the midst of exponential growth. Breaking its record for construction permits in 2021 with over $2 billion in permits, this redevelopment boom will continue to change the landscape of our city over the next several years.
Downtown Hamilton has already seen a massive 19 development projects completed with more on the way.
Check out our roundup of some of the most exciting Hamilton condo developments coming soon here.
The city is on-track for tremendous housing and economic growth. Some of the most prominent projects include the revitalization of 200 Centennial Plaza in Hamilton’s east end, mixed-use development projects at Lime Ridge Mall and Eastgate Square, and a $518-million deal to redevelop the prime waterfront land currently owned by Stelco.
However, in late 2021, Hamilton City Counsel made the surprising decision to effectively freeze the city’s limits, preventing further urban sprawl, preserving farmland, and ensuring that future developments use existing land rather than expanding out. It will be interesting to see how this impacts future developments over the next decades.
In an uncertain market, you need a Hamilton realtor with experience. If you’re planning to buy or sell this year, contact Michael St. Jean Realty at 1-844-484-SOLD or email us here to get the conversation started.
