Home Buying

Hamilton Housing Market Outlook 2023

Hamilton Housing Market Outlook 2023
Written by
  • Samson Solomon
| Aug 17, 2023
Reviewed, Sep 21, 2023

Table of contents

    Hamilton Market Report Summary

    • The benchmark single-family home in Hamilton increased by 0.6% year-over-year to $945,300 in July 2023. In comparison, provincially, the benchmark single-family home sale price in Ontario was up by 0.3% from a year ago to $1,007,200.
    • Hamilton’s benchmark townhouse house price decreased by 1.6% year-over-year to $720,100 in July 2023. In comparison, provincially, Ontario’s row/townhouse sale price is down by 3.4% from a year ago to $727,500.
    • The benchmark condo price in Hamilton decreased by 9.1% year-over-year to $557,400 in July 2023. In comparison, provincially, the benchmark condo sale price in Ontario is also down by 3.1% from a year ago to $654,300.
    • Hamilton’s benchmark composite home price decreased by 0.7% year-over-year to $873,600 in July 2023. In comparison, provincially, the average home sale price in Ontario was down by 0.7% from a year ago to $920,000.
    • The average rent for a 1-bedroom apartment in Hamilton increased by 8.3% year-over-year to $1,887 for July 2023.

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    Hamilton Housing Market Summary

    Data from the Realtors Association of Hamilton-Burlington (RAHB) indicates that the average price of resale residential homes sold across Hamilton in July 2023 was $873,600, a decrease of 0.7% compared to a year ago. 

    With a sales-to-new-listings ratio (SNLR) of 45%, Hamilton continued a second month in a balanced market in July with incremental increases to the composite price in all months this year except for June. However, both June and July remain approximately $4,000 below the highest composite price observed in May of this year.

    Verbatim: What local experts from the Realtors Association of Hamilton-Burlington (RAHB) say about Hamilton’s regional housing market:

    The RAHB reported 797 sales across the region in July 2023, a decline of 292 sales over the previous month but a gain over levels reported in July 2022. The sales to new listings ratio fell to 44%, with 1,840 new listings reported. The number of new listings increased relative to sales, causing inventories to trend up over the last month and levels reported earlier this year.

    “Another rate hike likely weighed on sales activity this month. However, it also supported further inventory gains and more balanced conditions compared to earlier this year. Despite the monthly gains in inventory, supply remains below last year’s levels and long-term trends for July,” says Nicolas von Bredow, President of RAHB.

    Months of supply rose to 2.9 months over the 1.8 months reported in June. The shift away from tighter conditions has paused price growth. The unadjusted benchmark price reached $873,600 in July, relatively unchanged over last month. Overall, prices remain much higher than pre-pandemic levels.

    Month-over-Month Market Expectations

    Month Composite Price Units Sold New Listings SNLR Market
    January $809,800 539 1,109 49% Balanced
    February $831,500 764 1,200 64% Sellers
    March $835,800 1,028 1,538 67% Sellers
    April $868,800 1,069 1,523 70% Sellers
    May $877,100 1,251 2,022 62% Sellers
    June $873,100 1,115 1,953 57% Balanced
    July $873,600 806 1,786 45% Balanced
    Data sourced from the Realtors Association of Hamilton-Burlington (RAHB) and the Canadian Real Estate Association (CREA).

    The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market. 

    Market Expectations Breakdown By Property Type

    Property Type Sales New Listings SNLR Benchmark Price Market
    Single Family Home 515 1,144 45% $945,300 Balanced
    Townhouse/Row/Multiplex 200 396 51% $720,100 Balanced
    Condo / Apartments 88 238 37% $557,400 Buyers
    Total Residential 806 1,786 45% $873,600 Balanced
    Data sourced from the Realtors Association of Hamilton-Burlington (RAHB) and the Canadian Real Estate Association (CREA).

    Historical Changes To Benchmark Prices In Hamilton By Property Type

    Who’s Buying Hamilton Real Estate?

    Until recently, the primary demographics driving demand in Hamilton’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s most lucrative markets, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in the nation’s economic engine. 

    With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the Hamilton homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Hamilton will have an impact; according to Statistics Canada, foreign investors make up less than 5% of the total homeownership in the Greater Toronto-Hamilton Area.

    Multi-property Investors

    According to a report by Teranet, investors and multi-property owners accounted for over 25% of Ontario’s homebuyers in 2021, particularly centred around the Toronto region. Consequently, the largest segment of the real estate market in Toronto region is now multi-property owners, ahead of first-time buyers, which was the market’s largest segment until 2016.

    First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference. 
    According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.

    Upsizing Buyers

    Upsizing by buyers has driven Hamilton-Burlington’s demand for detached homes, Detached home prices saw the largest year-over-year adjustment at nearly 24%. Despite the year-over-year decline, the recent shifts in price trends should help support a more stable price environment this year Upsizing buyers also continued to explore secondary markets like Brantford, Kitchener, Guelph and St.Catherines over the last 6 months.

    Immigration & Out-of-province Migration

    While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Hamilton homes a continued surge.  Although many Hamiltonians continue to leave Hamilton due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in one of Canada’s largest cities, including Hamilton.

    First-Time Homebuyers

    Getting a mortgage in Hamilton as a first-time buyer can be challenging for many as it is one of the most appreciated markets in Canada.

    While programs like the First Time Home Buyer Incentive are in place to help people afford homes in the city, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $150,000. 

    Given the slowdown over the last 12 months in home prices, Hamilton remains a difficult market to purchase a first home without outside financial assistance. Unsurprisingly, first-time homebuyers are no longer the largest segment of the city’s real estate market. 

    Rents Continue to Surge Across Canada in October

    Rapidly escalating rents have become a nationwide concern in Canada, profoundly impacting family budgets and exacerbating the housing affordability crisis in several regions. Let’s review rent increases and their implications on Canadian households.

    According to Urbanation’s November 2023 Rentals.ca Report, the average asking price for rental units in Canada hit $2,178 in October, marking a significant 9.9% increase compared to the previous year. This surge is not recent; rents have consistently hit new highs for half a year. On a monthly scale, the average asking rents witnessed a 1.4% rise in October, a slight dip from the 1.5% and 1.8% monthly increments in September and August, respectively. These fluctuations are typically attributed to seasonal variations.

    The average rent for 1-bedroom units reached $1,906 in October, a whopping 14% higher than in 2022. Similarly, the average asking price for 2-bedroom units was $2,255, an 11.8% annual increase.

    Price escalations in Alberta, Quebec, and Nova Scotia fuel Canadian rent inflation. This inflation is partly due to substantial population growth and an influx of new rental supply priced above the average market rates. Among Canada’s major cities, Calgary in Alberta saw the highest annual rent growth for apartments for 9 consecutive months.

    In Alberta, the standard rental price for purpose-built and condominium apartments reached a high of $1,686 in October, marking a 16.4% increase from the previous year. This rate outpaced the growth seen in September, which was 15.3%. In Nova Scotia, the average rent for apartments rose by 13.6% compared to the year before, reaching a price of $2,097. Quebec followed closely with a growth rate of 13.3%, leading to an average rent of $1,977.

    Despite these increases, British Columbia held onto its crown as the province with the highest average apartment rents, clocking in at $2,639 in October. However, B.C. experienced a slight dip of 0.6% in its rent month-on-month, marking its second successive monthly drop. This drop resulted in a decreased annual growth rate of 9.8% in October from 12.3% in September. Vancouver consistently ranks as the priciest city for tenants in Canada. The average rent for a 1-bedroom unit in Vancouver was $2,872, and a 2-bedroom.

    Edmonton climbed the ladder to secure the third spot in yearly rent increase among the most significant Canadian cities, with apartment rents witnessing an 8.6% rise annually, reaching an average of $1,461. Conversely, Ottawa slid from third to fifth as the annual rent increase slowed to 3.5% in October (down from a 9.7% yearly rate in September), with rents averaging $2,197. The asking rents for apartments in Ottawa experienced a minor slump of 0.3% on a monthly basis. While these figures were slightly lower than September’s prices, they marked an annual increase of 6.7% and 5.5%, respectively.

    Ontario recorded the slowest annual growth in apartment rents in October, with a modest increase of 4.6% (in contrast to the 6.6% increase reported for September). After falling by 0.4% between August and September, the average rent requests in Ontario are stabilizing.

    For the ninth consecutive month, Calgary has reigned supreme in yearly rental increments for flats amongst Canada’s most populous cities. The request for purpose-built and condominium apartments in Calgary saw a significant surge of 14.7% from the previous year, settling at an average price of $2,093. Montreal held its position as runner-up, with an annual rent increase of 10.2%, accumulating to an average of $2,046 as of October.

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    In Vancouver, the priciest among Canada’s major cities, average rents fell by 3.7% month-on-month to $3,215. The annual rent increase in Vancouver decelerated to 4.4% in October (down from 7.7% in September). Toronto recorded a year-on-year decline of 0.8%, averaging $2,908 — marking the first annual rent drop since August 2021.

    Of Canada’s top 25 rental markets with the highest costs, Ontario was home to 14, British Columbia (B.C.) 9, and the remaining 2 in Quebec.

    The 3 priciest regions for average apartment rental rates in October among small and medium-sized cities were all based in British Columbia. They included North Vancouver, with an average ask of $3,360; Coquitlam, at an average of $3,116; and Richmond, with an average of $3,051.

    Ontario dominated the list of the top 10 priciest markets with 6 cities. The highest-ranking Ontario city was Oakville, in fourth place, demanding an average rent of $3,008. This was followed by Vaughan in sixth place with an average rent of $2,754 and Mississauga in seventh place with an average of $2,700. In the high-end rental markets outside the Greater Toronto Area (GTA), Kanata came out on top in October with an average rent rate of $2,561. Barrie, Guelph, and Waterloo followed closely behind with their respective rates of $2,326, $2,246, and $2,227.

    In Quebec, the areas with the highest average apartment rents during October were represented by 2 Montreal markets: Côte Saint-Luc ($2,458) and Mount Royal ($2,427). Notably, Côte Saint-Luc witnessed the most rapid rent growth in October, recording a 36.6% annual increase. This was followed by a 29.1% yearly hike in Richmond and a 22.3% annual surge in Red Deer. 

    During October, we observed a notable surge in listings for co-living spaces across provinces like B.C., Alberta, Ontario, and Quebec. Compared to the previous year, the numbers climbed a significant 42%. Parallel to this increase, the average rental prices for shared residences also experienced growth. A rise of 19% was recorded on a year-over-year basis, reaching an average monthly rental of $964.

    Specifically, shared accommodation rentals commanded the highest rents in B.C., where the average cost was $1,176. In particular, Vancouver emerged as a pricy city for such arrangements, with an average rent of $1,454. Moving over to Alberta, renters seeking roommates were typically expected to shell out an average monthly rent of $870 in October. In terms of cities, Calgary noted an average of $911, while Edmonton was slightly more affordable at $737.

    Ontario did not lag far behind B.C. in terms of high rents for shared accommodations. It held the position of having the second-highest average roommate rent in Canada at $1,068. Toronto led the pack in the province with an average rent of $1,312, and Ottawa followed with an average of $966. Meanwhile, Montreal’s shared housing market in Quebec saw an average asking rent of $873.

    Final Thoughts

    Several factors contribute to the escalating rental situation, including interprovincial migration and a declining homeownership trend due to high interest rates. A third of Canadian households are renters, a rate growing twice as fast as homeowners. As rents continue to soar, Canada must address housing affordability and ensure adequate rental supply. These issues are not only affecting family budgets but also contributing to broader economic challenges, including inflation. By tackling these issues head-on, Canada can ensure a more sustainable and equitable housing market for all its residents.

    Market Rents Summary

    Each $100K in mortgage balance costs an average of $601.11 per month on nesto’s lowest fixed 5-year rate at and $641.25 per month on nesto’s lowest variable 5-year rate at .  Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization.  Each 0.25% change in mortgage rates impacts the monthly payment by $15 on a 25-year amortization.

    Rental Prices Compared to Other Canadian Cities

    Rental Prices Compared to Other Provinces and Nationally

    Average Rents by Housing Type

    Rental Growth by Housing Type

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    Frequently Asked Questions

    Is the Hamilton housing market going to crash?

    Hamilton home prices are currently sagging due to surging mortgage rates. Hamilton prices remain some of the highest in the country due to its proximity to Toronto, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. Hamilton area prices will recover quicker than other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes.

    Will Hamilton’s housing prices increase in 2023?

    Although currently declining, many experts believe that a turnaround is imminent.  Buyers are waiting on the sidelines for the opportune time to make a move.

    How do I get approved for a mortgage in Hamilton?

    To get approved for a mortgage in Hamilton, look at Hamilton mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in Hamilton at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote.

    Final Thoughts

    Hamilton’s property market is set to remain strong as increases are expected for the remainder of 2023. The average home price in Hamilton has dropped significantly over the last year. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the city has ever seen. 

    While the property market appears to be shedding value in Hamilton, it’s important to remember that this is relative to a long period of superheating in the area. 

    If you are looking for a home in 2023, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.

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