Hamilton Condo Market

[HAMRetrofit]

Since so much discussion is going on regarding this topic I decided to create a new thread.

This is posted by MLS last year regarding the Hamilton Condo Market.

http://www.rahb.ca/FYI/070705stats.pdf

(July 5, 2007 – Hamilton, Ontario) The Hamilton-Burlington area real estate market reported a total of 1,534 unit sales in June, indicating an increase of more than 15 per cent over the same period last year. The total unit sales for the first half of 2007 are being reported at four per cent higher for the same period last year, while units listed are six per cent higher for the year-to-date, according to Multiple Listing Service® (MLS®) statistics released by the REALTORS® Association of Hamilton-Burlington (RAHB).
“The housing market remains exceptionally strong in the Hamilton-Burlington area,” said Mike Cusano, RAHB President. “Although overall June sales did not surpass the historical records set in May, the condo market witnessed its most active month yet, with more condominium properties changing hands than in any previous month.”
Residential properties sold during June totalled 1,472 which included 1,156 non-condominium and 316 condominiums. Commercial sales for June, including industrial, farm, vacant land and business, totalled 62 units.
The average price of non-condominium residential properties sold for the month of June was $287,987, an increase of nearly eight per cent over the same month last year. The average sale price reflects the dollar volume of residential sales divided by the number of total residential units sold.
In the condominium market, the average price of condominiums in June was $202,692, an increase of seven per cent over June 2006.
June’s total residential average sales price increased over seven per cent over the same month in 2006.
The total number of current units listed for sale during June was 2,011, which is
10 per cent greater over the same period last year.
“The continuation of solid sales activity can be attributed to a combination of
factors, with buyers being motivated by the prospect of higher interest rates, ongoing affordability and stable investment opportunities with returns on the rise,” added Cusano. “The Hamilton-Burlington area continues to be a great place to buy a home, which is demonstrated by high rental vacancy rates in the region, a trend often attributed to the narrowing cost gap between owning and renting, as well
as condominium completions.”
Unit sales reflect “all property types” including residential, condominiums,
commercial property, farmland and sale of businesses.

[raisethehammer]

for what's it's worth...this report says the AVERAGE price of a condo in downtown TO was $327,000 in 2007.
West End TO was $230,000
Mississuaga was $211,000

http://www.remax-oa.com/MarketReport...PR2008_REL.pdf

Back when this discussion was happening in the Lister forum someone suggested that the AVERAGE in TO-Mississuga was $400-$450,000.
Not even close.

[flar]

I actually don't think there's a large demand for condos in Hamilton.

This city has a long history of families aspiring to single family homes as a marker of status. Class is spatially distributed in housing in every city, but class differences are particularly marked in Hamilton (for a Canadian city). If you look at the lower city you can see that rowhouses and Toronto style semi-detached quickly went out of style for the working class, replaced with the endless rows of identical 2.5 storey detached houses. The mid 19th century rowhouses became slums early on. The type and location of a house came to differentiate tradesmen and better paid workers from unskilled and immigrant labourers. Rowhouses were considered overcrowed and unsanitary and are mostly gone now. Later, new subdivisions on the mountain and in the far east end (like Rosedale) were marketed towards the more well off blue collar families.

On my recent tour of suburbia, it was obvious that new subdivisions continue to be marketed toward "middle class" families, these mostly come from a blue collar background in Hamilton. They sell lifestyle in exactly the same way as Toronto condos sell a lifestyle, but the impulse in Hamilton remains geared toward home ownership, even for the younger generation. Some young people and some early retirees will choose condo living in Hamilton, but the impulse toward home ownership is deeply ingrained and it seems the majority will choose home ownership.

Home ownership outside the industrial city as a local marker of status will be ingrained in native Hamiltonians with blue collar backgrounds for some time. A market for the "hip, urban condo lifestyle" depends on newcomers to Hamilton, and that depends on successful transition to a postindustrial economy and a younger and more highly educated workforce. Even with a successful postindustrial transition, condo demand will be mitigated somewhat in the short term by the continued availability of affordable houses, both new and old.

[HAMRetrofit]

Flar, I respect your opinion and think that it holds true for a portion of Hamilton's population. I think that the blue collar label some people are still throwing around at Hamilton is quite unfair. The city has come a long way from its early industrial heyday. I think home ownership will play a significant role in the future but will not be an impediment to the Hamilton condo market in general. Hamilton will be growing in two primary ways in the future: immigration (likely from South Asia) and migration from the GTA. Evidence from the settlement of this new population suggests that they will choose the downtown area. Native Hamiltonians will aspire for home ownership to some degree, but the new and growing population will only be doing so by a lesser degree.

The economy of Hamilton is diversifying. Most of the growth is in health services, education, and to some degree the arts community is thieving. Health services is now the largest employer in the city. These employees do not necessarily aspire for home ownership. Also, the highly educated by sector are the most likely to reside in downtown areas. Combining this with an aging population that is buying condos there is clearly a niche for urban living and condos in Hamilton. Look no further than your home town of Dundas. The aging population is looking for a walkable living arrangement and the downtown is the best place to deliver. Add the younger demographics that are first time buyers in the condo market and want to be in an urban environment. Factor in the raising cost of fuel and food, etc. etc. Condos will play an important role for Hamilton's future real estate market.

In general, Hamilton usually closely follows Toronto's real estate booms. The general trends in Hamilton are usually an extension of what plays out in Toronto. Hamilton has all the elements that Toronto has ie. similar Victorian row housing, commie slabs, waves of tract housing and big box development, and next glass condos. The wave of glass condos that has hit Toronto and Mississauga will drift its way into Hamilton especially with provincial policy mandating intensification and likely rapid transit.

[coalminecanary]

Another point to consider is that currently home prices a stone's throw from downtown are very reasonable. I am sure this is one major reason that "next generation" hamiltonians are aspiring toward home ownership. In fact, reasonably prices detached houses probably have more to do with this than status ideals left over from previous generations.

These prices are quickly changing however, and as downtown development increases (especially with the real possibility of LRT), these areas will become more desirable and prices will go up.

Then we'll see a case where buying a detached home is just not possible for many younger people, so if they want to be downtown they will have to choose between renting a house (or part of one), or buying a condo.

I'm sure this is a big part of toronto's condo economy.. for many it's the ONLY way to achieve ownership near the core.

Of course there are also the hardcore condo lifestyle people who pay more for a condo than you can get a house for, but i'm sure these people are in the minority in most cities including hamilton and toronto...

just some thoughts :-)

[raisethehammer]

Originally Posted by coalminecanary

Another point to consider is that currently home prices a stone's throw from downtown are very reasonable. I am sure this is one major reason that "next generation" hamiltonians are aspiring toward home ownership. In fact, reasonably prices detached houses probably have more to do with this than status ideals left over from previous generations.

These prices are quickly changing however, and as downtown development increases (especially with the real possibility of LRT), these areas will become more desirable and prices will go up.

Then we'll see a case where buying a detached home is just not possible for many younger people, so if they want to be downtown they will have to choose between renting a house (or part of one), or buying a condo.

I'm sure this is a big part of toronto's condo economy.. for many it's the ONLY way to achieve ownership near the core.

Of course there are also the hardcore condo lifestyle people who pay more for a condo than you can get a house for, but i'm sure these people are in the minority in most cities including hamilton and toronto...

just some thoughts :-)

this is the most valid point in the discussion. Affordability.
Hamilton's core has seen a great trend of home reno's and neighbourhoods coming back to life. Another 5-8 years from now we'll see higher and higher prices for homes downtown leading to a better condo market.
That's exactly what has happened in TO. Eventually the market changes to the point where owning a condo IS considered home ownership (as it should be). It's not rental. It's purchase.
Many of homes for sale in the $150,000-$200,000 range in downtown Hamilton, especially to the immediate west, south and north of the core, are nothing compared to what you could get for that price 5 years ago.
5 years from now it'll be almost exclusively massive fixer-uppers and small two-bedroom homes selling in that range.

[SteelTown]

I think we'll see more condo developments happening in the West end than in the downtown.

If we get all day GO Transit service than the downtown property value will increase which in turn will increase the demand for condos for the downtown.