Housing prices in the Hamilton area have rocketed upwards by 16.6 per cent over the past year, the biggest jump in any real estate market in Canada.
Statistics from the Canadian Real Estate Association that compare average prices last month to those from August 2014 show that a continuing hot housing market in Hamilton is having a strong effect on prices.
In Vancouver, by comparison, prices went up 12.2 per cent while Toronto saw a 10.3 per cent jump. Also interesting was that Ottawa saw a 2.1 per cent decline.
The Realtors Association of Hamilton-Burlington says CREA used slightly different gathering methods to arrive at its numbers.
But the Hamilton association’s numbers are nearly as high.
Looking at the Hamilton Census Market Area that includes Hamilton, Burlington and Grimsby, the RAHB increase was 13 per cent.
In the Hamilton CMA, 979 residential properties were sold with an average price of $426,026 in August 2015. Last August, 949 properties were sold with an average price of $377,015, according to the RAHB.
RAHB president Donna Bacher believes it’s not just a case of demand vastly exceeding supply. For one thing, the hot market is encouraging homeowners of dilapidated homes to invest in their properties.
And when those properties are sold, it’s for vastly higher prices than they could have commanded before. That’s helping to drive the average price upward.
Buyers coming from Toronto continue to be a big factor in driving the Hamilton market, Bacher says. In addition, many older homeowners are staying in their homes longer, putting a further damper on the supply.
Until the end of August this year in the Hamilton area, there have been 11,235 sales, compared to 10,072 in the same seven-month period last year.
The year 2014 ended with 14,292 sales.
“We forecasted 14,500 sales this year and I think there will be more than that,” says Bacher.
Richard Harris, a geography professor at McMaster University, says spiking prices have implications for renters as well.
“In one sense, it’s unquestionably good news. But then there’s all the people who aren’t part of the story,” he says. “It’s not good for the people trying to get into the market … and there’s no good news for renters at all.”
As house prices go up, so do rents — taking home ownership that much farther out of reach for many renters, Harris says.
The income gap between renters and homeowners has almost doubled today from 50 years ago, he adds.
And while there is an indisputable need for more rental units and more affordable housing in general, he says reports like these should also have us questioning our philosophies around home ownership.
“The larger problem, I think, is the way that we have always … promoted home ownership as the be-all and the end-all,” he says.
“Because almost everyone sees the ultimate goal as owning a home, they fight and work and strive mightily to achieve that. And they bid like crazy and go in over their heads in debt in order to accomplish that … house-poor is the old phrase, but its truer now than ever.”
He cites by way of comparison European countries like Germany, “where renting isn’t seen as very clearly second best.”