Metro Hamilton
Real Estate Trends and Price Forecast
HIGHLIGHTS
Home values in Metro Hamilton have been volatile in recent years, see-sawing up and down since 2021.
Industry experts declared market conditions were improving early in the year compared to 2023, but that’s no longer true.
Purchases (demand) are at historic lows, and active listings (supply) are higher than at any time since 2018.
A multi-factor analysis identifies Metro Hamilton as a moderate-risk real estate market.
Budgets for home purchases are under strain due to the historically high mortgage rates since their historical lows. Promised rate cuts are delayed because inflation has been more difficult to control than expected.
This article covers:
What is the state of the Hamilton property market?
Where are prices headed?
Should investors sell?
Is this a good time to buy?
1. What is the state of the Metro Hamilton property market?
Home Price Overview
The pandemic turbocharged Metro Hamilton’s housing market, driving up prices at a remarkable pace and causing aspiring homeowners to be pushed further away from their dreams. And just when they thought things couldn't get trickier, rising interest rates now force even more potential buyers to sit on the sidelines.
For those contemplating selling their homes, waiting until next Spring might bring some advantages if you aren’t in a hurry. Spring is the best time to sell because there is typically less supply. Buyer activity in Canada typically peaks in May. Families like to move over the summer so their kids don’t need to switch schools in the middle of the year. This is the typical annual real estate cycle.
Prospective homebuyers might consider waiting for a lighter mortgage burden. Mortgage rates are relatively high but are expected to fall in late 2024. Patience will be needed because forecasters keep revising their predictions, pushing out the date when they expect rates to drop.
The market fundamentals are riddled with risk and uncertainty as consumer sentiment has taken a substantial hit. But remember, consumer sentiment can be volatile and is an unreliable predictor of future price trends.
Statistics Canada defines Metro Hamilton as the cities of Hamilton, Burlington, and Grimsby.
Metro Hamilton Detached House Prices
Since the peak in February 2022, house prices in the Hamilton-Burlington area have fallen significantly. Government intervention successfully shielded the real estate market from the pandemic-induced recession, but now higher interest rates are weighing on the market.
We believe politicians hope to guide the market toward a typical annual real estate cycle with a price growth of 1 to 3% annually – in line with income growth.
Many people want to buy a home, but affordability is very low, which is reflected in the number of successful purchases. Significantly fewer people can realize their homeownership dream in these market conditions.
New homebuyers can’t afford to get on the first step of the homeownership ladder, and households who want to climb the next rung (i.e., upgrade to a larger home) can’t qualify for a new mortgage at the current rates.
Meanwhile, the total active listings are trending upward. They are at their highest level in three years.
Hamilton-Burlington New Construction Home Prices
Prices of new homes are dropping. Some homeowners in new developments might find they will have paid much more than their newest neighbours. Based on economic fundamentals, this trend is likely to continue.
As a pre-sale buyer, be sure to demand a discount.
Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes
Even though the market is softening, there is a near-record number of new home completions. Adding even more supply to the market. New construction starts have begun to slow, but there is enough in the pipeline to provide a steady stream of new stock until early 2026.
Market Risk
Based on Mortgage Sandbox Analysis, Hamilton is at moderate risk of a significant market correction.
Need a great local Realtor?
Our app matches you with local pre-screened, values-aligned agents.
Metro Hamilton Condo Apartment Prices
After breaking records during the pandemic, Metro Hamilton apartment prices are flat.
With more people working from home, we expect developers will begin marketing larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.
At Mortgage Sandbox, we would like developers to build 4 and 5 bedroom condos because:
Not everyone can afford to buy a house for their family.
Canadians who work from home need more room to segregate workspace from living space.
Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).
Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.
Metro Hamilton Townhouse Prices
Still a challenge for first-time homebuyers
It is still quite challenging for first-time homebuyers in Hamilton. The city's housing prices have become much less affordable. A household with a first-time homebuyer earning $91,000 (the median before-tax income in Metro Hamilton) can secure a $320,000 mortgage. With a $80,000 down payment, they would only be able to purchase a home valued at $400,000. However, the benchmark price for a condo apartment is over $500,000. This means that in order to buy a typical condo apartment, a household would need to receive an inheritance or a very generous gift from family, which is not feasible for most people.
How much home can you afford?
Our mortgage calculator takes uses up-to-date mortgage rates and calculates the price of a home you could afford.
What about the rest of Canada?
Read the Toronto Forecast, London Ontario, Montreal Forecast and the Vancouver Forecast.
2. Metro Hamilton House Price Forecast
There is a lot of uncertainty in the forecasts for 2024, 2025 and 2026. Many of the forecasters we've surveyed have different expectations for:
Will the federal government achieve its aggressive immigration targets?
There is no consensus among economists.
How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.
Break up with your Realtor?
Our FREE app Matches you with local agents who are predisposed to work well with you!
At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms, and we then present the most optimistic estimates, the most pessimistic prediction, and the average forecast.
Do you want to learn more about real estate risk? We've written a comprehensive report explaining the uncertainty level in the Canadian real estate market.
Our forecast inputs:
3. Should Investors Sell?
From a seller’s perspective, more changes in the market influence prices downward, so now may be a better time to sell than in two years, and the annual real estate cycle usually favours sellers in the first half of the year.
Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.
Planning to Sell? Check out our Complete Home Seller’s Guide.
Fixed or Variable rate mortgage?
Find out where mortgage rates are headed before you start to negotiate.
4. Is this a good time to buy?
It’s hard to say. Interest rates (borrowing costs) are high and supply is rising, so prices could begin falling. It's almost impossible to time the market. If you are buying your forever home and don't plan to sell it for ten years, then the risks of buying it now are lower.
Regardless, the annual real estate cycle usually favours buyers in late summer.
If you are considering buying, drive a hard bargain and pay as close to market value as possible. Also, don't bite off more than you can chew when it comes to financing.
Planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!
Find a local Mortgage Broker
Our FREE app matches you with local pre-screened brokers who share complementary working styles.
Here are some recent headlines you might be interested in:
Toronto newcomers paying up to 12 months' rent up front to secure housing | CBC News
Sales of new and presale condos plummet in the GTHA, data firm says | CBC News
Wave of mortgage renewals drives owners to list homes, analysts say | Global News
Supply in Canada's property market surges as mortgage renewals loom | Reuters
Young People in Canada Are Trading Toronto for Cheaper Suburbs and Cities | Bloomberg
‘It’s crickets’: How sellers are getting creative in a slow housing market | Global News
Like this report? Like us on Facebook.