The Realtors Association of Hamilton-Burlington (RAHB) says home sales across the region were 11 per cent lower in 2023 compared to the previous year and suggest increasing interest rates likely kept many buyers out of the marketplace.
RAHB president Nicolas von Bredow wasn’t surprised by the number saying Bank of Canada moves appeared to “take a lot of purchasing power away” from people and some of the homes they could qualify for.
“The way interest rates went up over the past year and a half to two years … there’s a lot of the buyers out of the market because of that,” von Bredow said. “What they could afford is a lot less now than it was a year and a half ago.”
He says the first part of last year didn’t see sellers put many homes on the market and that higher-priced detached and semi-detached properties were the primary drivers of a decline in overall sales.
Homes priced below $600,000, which represent only about 20 per cent of supply in the region, were in demand while higher-priced detached and semi-detached properties were not so much.
“Inventory levels are lower. They were extremely low for the first half of 2023 and then the second half we did see inventory levels starting to rise,” von Bredow explained. “So our month of supply right now is at 4.3, meaning it’s going to take 4.3 months to use up all the supply in the market right now, which is 26% higher year over year.”
Increases in supply during the latter half of 2023 put downward pressure on home prices equating to a decline in benchmark prices by some nine per cent compared to last year.
Overall for the region, the average residential price went up in 2023 to $822,709, about a two per cent increase. Hamilton was up 1.2 per cent to $750,376 and Burlington saw a 2.7 per cent bump to $1.05 million.
The average price of a detached home in Hamilton for 2023 was $822,354, while the average apartment-style dwelling went for about $428,524. The city reported 6,131 sales in 2023, a decline of 12 per cent from 2022.
Flamborough and Ancaster were the only regions reporting homes costing more than $1 million on averagefor all of 2023, while Hamilton Centre had the cheapest average price at about $560,000.
With the possibility of interest rate cuts by the spring, von Bredow expects a “strong balanced market” in 2024 with numbers “really increasing” in the second half of the year.
“I think that will give buyers some indication that the increases have stopped and they’ll come back into the market because then they’ll have a better understanding of what’s happening and there’ll be more stability around their decision-making process,” he suggested.