In the spring of 2017, real estate investors were subjected to a housing market unlike any they had ever seen. Housing prices rose at incredible rates, and in some instances, nearly doubled or tripled in value in less than a week. Intelligent investors were able to uncover the opportunities that Hamilton’s Real Estate Market offered and put them to good use. Hefty profits were made in record shattering time as everyone that could took advantage of the skyrocketing market.
But as the cliche often states, “all good things must come to an end,” so did the booming property values. With the help of a sales tax hike subjected to foreign buyers who are not residents, the market has cooled and returned to a much more normal rate.
The 2018 housing market has been forecasted to be a much different market. While the skyrocketing enigma of 2017 was impossible to predict, the market of 2018 is projected to be much cooler and stable. Intelligent investors will see the need to readjust their strategy to meet the market’s shift in demand if they are to generate a profit with their investments.
Hamilton’s Real Estate Market is expected to rise and fall throughout the year with a growth rate of no greater than 1%. Investors will need to invest more time and possibly more money but there are plenty of opportunities this year as Hamilton continues to grow.
Here are 3 things that are predicted to impact Hamilton’s Real Estate Market in the upcoming years:
1. The Newly Implemented ‘Stress Test’
As of January 1st 2018, borrowers are required to pass a ‘stress test’ on their mortgages. Simply put, the stress test determines whether or not a the borrower would be able to make their payments should their interest rates rise by 2 percentage points. These new requirements means fewer people will be able to qualify for loans than in previous years and if they do qualify, the amount they are able to borrow will be significantly reduced. First time buyers will be greatly affected and possibly rejected by these terms and conditions, but seasoned investors will unlikely be troubled by these new restrictions.
This regulation, implemented by the federal government, is predicted to aid in the maintenance of the current housing rates for Hamilton’s real estate market. The stress test could also force more Torontonian homebuyers to relocate their families to areas within the Golden Horseshoe. Hamilton could see many more buyers with higher incomes and stronger revenues in the upcoming years. Source
2. Buyer Taking More Time for Purchases
Less mortgage qualifying borrowers could be great news for qualifying homebuyers. With less competition and more homes to choose from, buyers are anticipated to take longer when making decisions. With fierce competition out of the way, well researched and well informed buyers will take longer, but they won’t falsely hang on. Hamilton’s real estate market will continue to be a buyers market, in favour of the buyers. Sellers will require more patience but they won’t need to wait forever. Source
3. The Unemployment Rate is Forecasted to Increase by 1.1% in 2018
Hamilton ended 2017 with one of Canada’s lowest unemployment rates across the country, but with the possible threat of President Trump’s proposed tariff tax, it has many residents worried. The proposal to enforce a 25% tax on foreign steel could have negative consequences on the 9000 residents who rely on the steel industry to keep them employed. With this in mind, the unemployment rate is predicted to rise this year by nearly 1%.
If these tariffs do become a reality, Hamilton’s real estate market could see higher income Torontonians buying more urban centered homes while steel industry employees may opt for the cheaper rural properties instead.
Hamilton’s diverse economy will continue to give it strength, as healthcare and education continues to grow, and will likely keep Hamilton’s real estate market with a steady flow of buyers. The mixture of growth and possible unemployment could help keep the prices of homes in Hamilton’s market steady and keep the power close to the buyers. Source
Hamilton’s rich history and diverse economy will continue to be the magnet of attraction for future residents and investors interested in the area. The many proposed and newly finished projects, such as the Go Station and the recently opened $33 million biomedical research center, will continue to draw students and professionals into the Hamilton area. By 2031, the population of the City of Hamilton is predicted to grow to 660,000.
Hamilton’s real estate is expected a continuous growth but it will take much more strategic planning from investors. There are many opportunities investing in the future.