A new Re/Max Canada report says lower prices brought a lot of home buyers looking to upgrade or make lateral moves into Hamilton this year, but many appeared to struggle with a purchase due to a lack of supply.
The real estate firm is saying low supply at affordable price points hampered sales in the municipality with just some 3,600 properties changing hands between January and June, a decline of 24 per cent from the same period in 2022.
“On this cycle, there were multiple offers on the majority of listings … more than 50 per cent of listings, especially in the Hamilton-Burlington area,” Re/Max President Christopher Alexander said.
“We’re getting multiple offers and that typically pushes prices up.”
Alexander says word of interest rate pauses, which began in early March, appeared to shift buyers into high gear as early as January with many having pre-approved mortgages seeking to purchase before rate-holds expired.
Showings, as of late June, are ahead of last year’s levels in Hamilton and Niagara.
“Those two pauses really gave consumers the confidence to jump back in the market, and they did so in a really big way,” Alexander revealed.
The year-over-year average price in Hamilton has declined 14 per cent, but not so between January and June of this year, with values escalating close to 11 per cent compared to the beginning of the year and the summer.
First-time buyers drove the bulk of sales of inventory priced under $800,000 in the city, believed to be spurred on by many seeking to get into home ownership before prices moved beyond their grasp.
Meanwhile, those looking for “move-up properties” spent their time seeking homes in the $900,000 to $1.1 million price point, where just over 13 per cent of sales were occurring.
Ancaster, Burlington, Dundas, Stoney Creek, Waterdown and Pelham were most popular with those buyers due to their walkability – livable spaces with high accessibility of amenities by foot.
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Niagara Region was also popular with those looking to upgrade, according to the report, due to “greater value for their dollar” with starting prices between $700,000 and $900,000.
Alexander says results from the report suggest an “insatiable appetite” to own real estate in Canada with just shy of 70 per cent of Canadians currently owning a home and about the same rate of people hoping to purchase one in the next five years.
“The Canada Mortgage and Housing Corporation (CMHC) last June said that we needed to build 3.5 million homes over the next ten years,” he said.
“Housing starts have actually fallen by 10 per cent since they made that report, so we’re going to face significant challenges and probably upward pressure on prices over the foreseeable future.”
Hamilton-area home sales up 19% from last year with average prices down: RAHB
The head of the Realtors Association of Hamilton-Burlington (RAHB) says the region had a slowdown in June after five consecutive months of upticks, likely due to Bank Of Canada (BOC) interest rate hikes.
Home sales in the area were up 19 per cent year over year in June despite new listings still below traditional levels.
The RAHB reported just over 1,100 sales across the region last month, despite new listings plummeting 21 per cent to just under 2,000.
The agency’s president Nicolas von Bredow says the impacts to his industry happen almost right away with each BOC announcement, due to many potential buyers needing to requalify for their mortgage.
“So there is a little bit of a slowdown … just so people better understand where their purchasing power is now after the increase,” von Bredow said.
“Sellers are also a little reluctant to list their property after an interest rate increase because they’re also concerned … what this change means for the market.”
The price of an average home in the RAHB region was down about two per cent from June 2022 to $912,815.
In the city of Hamilton, the price was down three per cent to $831,540 year over year.
About 650 homes changed hands in the city during June, up about six per cent from last year, despite a 22 per cent drop in new listings coming to the market.
The average detached home price across the RAHB slipped two per cent to $1,027,498 June to June, with apartment-style homes up close to four per cent to $595,038.
In Hamilton, a detached home averaged $921,496 slipping two per cent and an apartment-type dwelling dropped four per cent to $504,339.
Flamborough, Ancaster and Waterdown had homes costing more than $1 million on average for June.
The lowest average prices for the month were still in Hamilton Centre, where a home was around $607,583 down 2.3 per cent year over year.
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