GTA Real Estate: The Red-Hot Hamilton-Burlington Real Estate Market

The Greater Toronto and Hamilton Area (GTHA) is perhaps the hottest segment of the Ontario Real estate market today. From the downtown core of Toronto and Hamilton to surrounding areas, every housing market is booming. It is unclear when things will start to cool off, but there is enormous demand for detached, semi-detached and condominiums in the GTHA. With shrinking supply, strengthening demand and historically low interest rates, it’s hard to envision a substantial correction in this part of the province anytime soon. The Hamilton-Burlington real estate market has witnessed record-setting growth. Despite the rest of the red-hot Canadian real estate market ostensibly cooling off, Hamilton-Burlington is still on fire. And it seems that nothing will douse the flames.

But while this post-pandemic real estate market poses challenges for homebuyers, sellers are enjoying the monumental gains. So, just how strong were the figures in this local market as spring transitioned into summer? And as the temperatures outdoors soar higher, can we expect any cooling of the market in the months ahead? The local real estate association has all the latest numbers to help us gauge some answers:

GTA Real Estate: The Red-Hot Hamilton-Burlington Real Estate Market

According to the REALTORS® Association of Hamilton and Burlington (RAHB), residential sales surged close to 10 per cent year-over-year in June, totalling a little more than 1,600 units. Year-to-date, the number of homes sold advanced 57 per cent from the same time a year ago, hitting a record 9,518 units.

When looking at the housing market for this time of the year, home sales were 14 per cent above the five-year average and 11 per cent ahead of the decade average.

Housing prices have enjoyed significant double-digit growth. The MLS ® Home Price Index (HPI), which industry observers believe is more of an accurate reflection of market prices than average or median measurements, advanced 28 per cent to $879,100. Moreover, in the first six months of 2021, the average price of a home sold in the Hamilton-Burlington region climbed 30 per cent to $852,035.

All property types have enjoyed notable growth:

• Single-Family Homes: +30% to $932,700
• Townhomes: +26 per cent to $672,300
• Condominiums/Apartments: +19 per cent to $552,900

Overall, the dollar value of all properties sold in June spiked 39 per cent to a new all-time high for the month of June: $1.4 billion.

Once again, the market in the Greater Toronto and Hamilton Area (GTHA) is facing the same problems as the rest of the region: not enough supply and ballooning demand. But is relief on the way?

According to RAHB data, the number of new residential listings rose at an annualized rate of one per cent to a little more than 2,000. However, new listings were five per cent below the five-year average and just one per cent above the ten-year average.

Active residential listings fell 33 per cent in June from the same time a year ago to 1,219 units. This is the lowest level of active listings in more than three decades. Moreover, they were 48 per cent below the five-year average and 52 per cent below the ten-year average.

Inventory levels are half of what they were over the long-run average. The months of inventory were numbered at 0.8 at the end of June, down from 1.3 months from a year ago. They are also below the long-term trajectory of 1.9 months. This is an important measurement because it represents the number of months it would take for supply to be exhausted at the present rate of sales activity.

Despite declining housing stocks, new Canada Mortgage and Housing Corporation (CMHC) data highlighted considerable growth in housing starts. In June, housing starts climbed to 408, up from 231 in June 2020. Also, in the first six months of 2021, housing starts have totalled 2,222, up from 1,241 in the first half of last year.

“June’s home sales marked one of the strongest levels on record for this month. Year-over-year gains are expected to become more modest and may even be negative in the months ahead as we reach a crossover period where sales in 2020 roared back to life and sales this year are cooling off after a blistering pace,” said Donna Bacher, President of the REALTORS® Association of Hamilton-Burlington, in a statement. “With new listings only back around average levels this has done nothing to lift overall inventories from record lows. While market conditions remain historically tight with demand far outpacing supply, we are seeing average sale prices remain stable.”

Will the Second Half of 2021 Stay Strong in the Hamilton-Burlington Housing Market?

At this point, it’s challenging to forecast the Hamilton-Burlington real estate market witnessing any type of slowdown or correction. The fundamentals are strong, so a substantial modification would be hard to justify. Although financial analysts are talking about bubbles and peaks, the recent figures are pointing to sustained growth, particularly with listings struggling to keep pace with demand. As the last 16 months have proven, anything can happen, but it appears that Hamilton-Burlington will stay a seller’s market for more months to come.

Sources

CREA
CMHC