Hamilton housing to stay strong but slow its pace in 2016: CMHC
CMHC regional economist predicts prices will rise 3.7 per cent in 2016 over this year
Hamilton's housing market will stay strong but its frenzied pace will slow somewhat in 2016, a CMHC economist predicted at a local forecast event on Thursday.
The average price paid for a home in Hamilton will rise 3.7 per cent in 2016 over 2015 prices, said Abdul Kargbo, CMHC Senior Market Analyst for the Hamilton and Brantford region.
"The market will remain strong, but it's all relative," Kargbo said. "Relative to what?"
The next two years will have smaller jumps up in price than 2015, and fewer home sales, Kargbo said. But if you compare those to previous years in the wake of the recession, the market will still appear extremely strong.
Out-of-town buyers impact
Kargbo said he has done some number-crunching using 2013 Statistics Canada data to estimate that about 30 per cent of the home sales in Hamilton in 2013 could be attributed to buyers from Toronto.
And he thinks much of that out-of-town demand has continued.
"The impact that out-of-town buyers will have, that will still be there because the price gap will continue to be wide"(between a home in Hamilton and a home in Toronto), Kargbo said.
On the other hand, mortgage rates are expected to rise in 2016, which could cut into the demand.
What about apartments?
Kargbo forecasted dire news for tenants in Hamilton — he expects the city's apartment vacancy rate to be 2.2 per cent in 2016 and 2 per cent in 2017.
In April 2015, Hamilton's vacancy rate was 1.8 per cent.
$1 billion
Meanwhile, the city announced that for the fifth time in six years, the city of Hamilton has surpassed the $1 billion mark in construction projects permitted. As of the end of the day on Monday, the city had approved permits for $1 billion plus $116,000 worth of construction, according to city spokeswoman Ann Lamanes.