Hamilton housing prices up nearly 10 per cent despite pandemic

Aggregate price of a home increased 9.1 per cent to $592,059 in the second quarter of 2020, survey finds

Hamilton home prices are up nearly 10 per cent despite the COVID-19 pandemic, a new survey by Royal LePage has found.

According to the Royal LePage House Price Survey released Thursday, the aggregate price of a home in Hamilton increased 9.1 per cent to $592,059 in the second quarter of 2020.

Broken out by housing type, the median price of a standard two-storey home increased 9.7 per cent year-over-year to $616,992, and the median price of a bungalow increased 7.3 per cent year-over-year to $557,340. During the same period, the median price of a condominium rose 10.3 per cent to $414,110.

“I believe that interest rates are extremely low right now, which is obviously motivating people that were in the market to to seek the house they want,” said Joe Ferrante, Royal LePage State Realty broker of record.

“Are they looking possibly for a deal? A lot of people are at home right now and realizing that there are opportunities out there. But I would say the biggest thing driving it is the rates, and what’s driving the prices up is the lack of product … it’s a simple supply and demand issue.”

A buyers’ market
Ferrante said due to COVID-19, it’s a lot easier to be a buyer right now than it typically is to be a seller.

“[If] you want to buy something, you put on your mask, your gloves and off you go and you go into other people’s houses, but for sellers there’s still some reluctance there.”

“I’d say for every five people that would have potentially put their house up for sale, maybe three of them are, so that’s obviously driving up the prices.”

Home sales plunged earlier this year as the COVID-19 pandemic forced buyers to the sidelines, but they have picked up as businesses have started to reopen.
Even with the earlier plunge in prices, Ferrante said a year-on-year comparison in Hamilton shows the numbers are still relatively close.

“I think they were down by one or two percentage points for the number of sales overall, and that would be the entire Hamilton area, including Burlington,” he said.

“So it’s very, very close. Down but not substantially.”

Torontonians heading to Hamilton
Ferrante added that while there has always been healthy and steady real estate demand from Toronto, the level of interest his brokerage is seeing has significantly increased.

“The more Toronto-based buyers can work from home, the more demand there is for real estate in Hamilton,” he said.

“We are seeing young Toronto-based families who have been largely house-bound during the pandemic tell us that they need more space. Home offices and large yards quickly moved up the list of important features.”
Agents excited, but will it last?
Ferrante said it’s uncertain if the increased prices will last, and it’s clear what is the real reason for the uptick.

“I’ve got some agents that are excited but it’s too soon to tell where this is going to lead us.”

Nationally, the aggregate price of a home in Canada increased 6.8 per cent year-over-year to $673,072 in the second quarter. Once provinces allowed regular real estate activity to resume, demand surged in many markets. Inventory levels, already constrained pre-pandemic, have failed to keep pace.