Hamilton is an integral part of Ontario, situated on the west side of Lake Ontario. The population of the metropolitan exceeds over 721,000 inhabitants and has a total area of 1,372 kilometers. This makes Hamilton the third-largest city in Ontario and the ninth-largest city in Canada which explains the prime reason behind the high demand of Hamilton real estate market.
The city has got innumerous nicknames of its own, but out of all, the two most popular ones are "Hammer" and "Steel City" as Hamilton is home to huge steel industry. The metropolitan also has several family oriented communities, but there are also communities suitable for young singles. Areas like East Hamilton offer all the attractions young people desire, while a major proportion of families occupy the North Hamilton and South Hamilton areas.
The average buying price of a property in Hamilton soared to a record high in October 2021. In comparison to the month of September, the median sales price increased by 9%. This unconventional growth of pricing is a result of high demand in the fierce housing market in Hamilton. Compared to last year, the number of active listings this month has almost halved. The number of active listings in October 2021 was 457, compared to 867 in October 2020. At the same time, despite low inventories, sales activities are still active. Hamilton sold around807 homes in October, down by 18% year-on-year.
The most obvious sign of the tightness of the Hamilton housing market is the decline in the average number of marketing days, from 19 days in October 2020 to 13.5 days in October 2021. The number of homes sold has reduced, but the demand has not decreased in turn. In contrast, home sales in Hamilton are now faster than before and prices are soaring higher than expected. The average sales price for a single-family home this month was $ 943,961, which marks a 30% year-on-year increase and a nearly 8% monthly increase. The average sales price of townhomes was $ 732,546, marking a 31% year-on-year increase and a 4.6% monthly increase. The average price of the condominiums was US $ 497,230, with a monthly increase of 3.4% and an annual increase of 26%.
Despite such trends, home prices in Hamilton remain relatively affordable, with an average sales price of $ 603,000 in downtown Hamilton. In contrast, the median home price in Toronto is over a million dollars in most areas. As Toronto benefits from CMHC's expanded first-time homebuyer program and the evolving technology industry, this difference may continue to exist. The recent increase in the mortgage stress test rate to 5.25% may affect affordability for fringe buyers in the region. However, compared to Hamilton, it is more likely to affect more leveraged homebuyers in other parts of the Greater Toronto Area, because the Hamilton real estate market is cheaper.
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The demand of the Hamilton real estate market is primarily driven by immigrants hailing from larger cities in the Greater Toronto Area. Over the recent months, many potential buyers are searching for homes with large tracts of land, swimming pools, and communities with suburban and urban features.
This has been a frequently desired trend in the Canadian real estate market as well as in other makers across the globe, especially after the global COVID-19 pandemic. Now, a major proportion of home buyers seek more square footage and green space outside of urban areas. The factors that majorly affect this rapid trend include increased remote work, the desire for more space and less density, and lower home prices.
Recent data reveal that many first-time homebuyers in Hamilton typically come from the category of young couples, having a budget that ranges from $ 450,000 to $550,000. The most preferred housing type among such couples is a townhouse. The upstream market has recently seen a significant increase in activity and demand and is driven primarily by households.
Since the pandemic, more traditional home designs, proximity to good schools, and nearby pedestrian open spaces have been some of the top criteria for relocating buyers. In the coming years, the communities of the Hamilton real estate market expected to be the most in-demand by 2021 include Community Beach / Fifty Corners, Meadowlands, and Waterdown West.
The Hamilton real estate market is most likely to be busy as industry experts expect it to continue being a strong seller area in 2022 as the demand will increase exponentially due to the relocation of several buyers from the Greater Toronto Area. Due to the advent of such trends, the prices will continue to soar throughout 2022.
The median residential price in the Hamilton real estate market had previously increased to $ 651,418 in 2020 and wider figures are expected to hit in 2022 where a stable growing demand will lead to upward pressure on prices, with the median price of all property types expected to rise by almost 7%.