Questions regarding Hamilton’s economic vitality have long dominated conversations among both investors and local residents alike. This November The Doyle Team attended RAHB’s Real Estate Outlook 2019 breakfast in order to gain insights into Hamilton’s real-estate climate.

Most notable was Anthony Passarelli’s presentation on behalf of the Canada Mortgage and Housing Corporation. Discussion points touched upon NAFTA uncertainty, spikes in interest rates, and new mortgage rules. It has certainly been a strange year filled with stirring external factors. Much of this turbulence has led to a 2% fall in housing prices across the board according to RAHB-reported sales. The impending interest rate hikes are poised to compound this uncertainty as we look towards the new year. Rates are likely to climb from its current position of 5.34% to a forecasted position between 5.4% and 6.3% by 2019. As a result,  it is our recommendation at The Doyle Team that those intending to purchase real-estate lock into their mortgage prior to these changes being enacted in Q1 of 2019.

Given the impact of new mortgage stress tests and higher borrowing costs, it is widely speculated across Ontario that the apartment, condo, and the semi-detached housing markets will experience continued growth. Does this hold true in our Hamilton market? In our region, the amount of new apartment builds to be completed between 2020 and 2021 have dropped slightly from the 2018 average. However, with the long view in mind, it is pertinent to note that apartment construction has trended upwards over the last decade. Meanwhile, the number of new-build single-detached projects has continually fallen in recent history.

A neighbourhood analysis served as the central focus of the CMHC presentation:

Burlington Neighbourhood Performances:

Sales Outperform → Orchard, Corporate, and Central
Sales Underperform → Brant Hills and Tyandaga
Price Growth Outperform → Dynes, Roseland, Shoreacres, and Elizabeth Gardens
Price Growth Underperform → Maple and Plains

Hamilton Neighbourhood Performance:

The city of Hamilton is made up of a unique multi-level topography comprising of varying neighborhoods with unique characteristics. Naturally, the home market in these neighborhoods is equally as varied. The West Hamilton area has experienced a great deal of inventory supply coupled with limited price growth. Meanwhile, Hamilton Mountain is categorized as a price growth underperformer in the majority of neighborhoods. Within the Hamilton Mountain, the zones of Mountainview, Westcliffe, and Buchanan are underperforming in sales leaving behind excess inventory. Hamilton Centre is generally an outperforming area of late. The St. Claire and Gage Park areas are both sales and price growth outperformers. This is encouraging news to area residents and longtime advocates of the downtown core. The Hamilton East areas of Homeside, Parkview, and McQueston have outperformed in the realm of price growth. Moreover, this city zone has demonstrated heightened levels of sales relative to the larger Hamilton-Burlington region. As we move further east, Stoney Creek is experiencing a high level of sales performance accompanied by lagging price growth. Additionally, Ancaster has largely underperformed while Dundas has proven to be neutral.

Employment  Economy & Growth:

It is clear that Hamilton is positioned for long-term success spurred on by an increasingly diversified economy over the last decade. Hamilton Health Sciences alone employs more than 11,000 employees serving as one of Hamilton’s largest employers. In recent years ArcelorMittal Dofasco has recorded record profits and has approximately 5,000 employees stationed locally.  This cornerstone of Hamilton industry produces four million tons of steel annually, representing about 30% of Canada’s flat-rolled sheet steel shipments. Hamilton’s manufacturing sector is thriving relative to the rest of the province. Advanced manufacturing in Hamilton is up 10% over the last 12 years while manufacturing has seen a 1% decrease in Ontario overall. Hamilton’s appetite for business is expanding as it is now home to 7 industrial parks. The John C. Munro Hamilton International Airport has experienced substantial investment over the last few years. As of today, the Airport is home to 2,800 jobs.

With this job growth and diversification in mind, it should be no surprise that population growth is projected to increase to 660,000 by the year 2031. As our city grows the area of Elfrida has been identified as a preferred location for development to absorb this aforementioned population growth. The high standard of living one can experience in our city relative to surrounding areas, coupled with our continued growth leaves Hamilton positioned favourably moving forward.

*Much of the data expressed has been aggregated from Anthony Passarelli’s presentation on behalf of the Canada Mortgage and Housing Corporation and Guy Paparella’s presentation from City of Hamilton Planning & Economic Development on November 29th, 2019