With skyrocketing housing prices in Toronto in the past few years, the Hamilton real estate market is viewed as a tremendous alternative for Toronto dwellers and other urbanites looking for their dream home. The Hamilton-Burlington housing market outlook suggests that it’s making a strong comeback after the decline in activity during the COVID-19 outbreak. Let’s examine this current market situation in detail below:
The Hamilton Real Estate Market— Current Situation
As soon as we stepped into the warmer months this year, the Hamilton-Burlington real estate market quickly started recovering. With 80 percent of the inventory selling out each month, both the locations are now characterized as a strong sellers’ market. This shouldn’t come as a surprise to anyone who’s familiar with Hamilton’s real estate market for some time.
Prior to the COVID-19 crisis, in 2019, a 10.1 percent increase in home sales was seen, with 12,866 transactions in total. The market remained red-hot as we headed into 2020. The Realtors Association of Hamilton and Burlington (RAHB) revealed that the sales figure rose at a rate of 25.5 percent year over year in the regions, as of February 2020. It also stated that compared to February 2019, the average house prices increased by 15.5%, reaching $646,667 by February 2020.
According to Chris Maynard, the RE/MAX agent who specializes in the region, the Hamilton real estate prices continue to rise in line with the year-long trend. He shares that there are always more than a few interested parties for every home that’s available for sale in Hamilton. Based on the Hamilton Housing Market Report for August 2020, the market saw an average home price of $681,845 and 1266 new listings in the past 28 days (as of August 23, 2020).
Now that we know the current market situation, let’s now explore some of the 2020 real estate trends in Hamilton:
2020 Real Estate Trends in Hamilton
- Rapid Recovery
As discussed above, the Hamilton housing market is recovering at an incredible rate, particularly due to the sustained rebounds in home buyer demand for various reasons, such as low-interest rates. Persistently low interest means that borrowers need to qualify at higher rates than what they’ll pay.
In 2019, the lower rate environment pulled the Bank of Canada’s qualifying rate down from 5.39% to 5.19%. Yet, borrowers benefitted from greatly discounted fixed mortgage rates. This has worked to bring back the buyers, resulting in price growth and sales surges.
2. More Interest from Toronto Buyers
The dissolution of the office amid the coronavirus situation has worked favorably for the Hamilton real estate market. A large number of people are working remotely from homes. Due to its lower prices compared to the Toronto housing market, the Hamilton real estate market has been attracting home buyers working in Toronto.
Now that the work-from-home model has become common, Hamilton has become more appealing than ever to Toronto professionals. It’s no wonder that the luxury real estate properties in Hamilton and Burlington remain popular among buyers in Toronto and Peel region.
Not only are buyers confident, but they are also well organized in their ability to enter the market. It is clear that no one is now much concerned about the ‘downturn’ and there aren’t any worries over having to resell for a lower price.
3. Become a Sellers’ Market
The 2020 real estate market in Hamilton is expected to be a tough one for home buyers. A lot of people are looking for homes but there aren’t enough of them available. In other words, the demand and supply gap is predicted to widen. While price growth is also attributed to speculators/investors, the lack of supply or inventory is causing bidding wars that are leading to rising home prices.
It is true that sales and prices have seen massive increases in the past years, however, the same cannot be said about new listings. Thus, the Hamilton real estate market is increasingly becoming a sellers’ market. The total months of inventory, which is defined as the length of time it takes to completely sell off the available homes, keeps hitting a record low.
4. Cheap Mortgage Rates
For the entirety of 2019, the national central bank of Canada, The Bank of Canada (BoC), kept mortgage interest rates stable and relatively low at 1.75%. This allowed credit unions and banks to keep their line of credit products and variable mortgage competitively priced. Thus, borrowers in 2019 had access to some of the lowest mortgage rates in history. Based on the latest announcements by the BoC, the same is expected throughout 2020.
5. Easy to Qualify for Mortgage
Based on the latest reports, it’s clear that the government intends to make tweaks to create more flexibility for borrowers when it comes to qualifying for mortgages. This could mean reducing the qualifying rate or making it more dynamic-based on borrowers’ profiles. The requirement for borrowers to re-stress tested when switching between lenders can also be removed.
In summary, the Hamilton real estate market is back in business after the COVID-19 setback. If you’re looking for new condos in Hamilton, this is probably the best time to acquire them as the prices are only expected to surge!