- By Mike Heddle
- Posted Monday, May 01, 2023 1:04 pm
A senior analyst for the Canada Mortgage and Housing Corporation (CMHC) says Hamilton’s housing market is expected to make a “slow recovery” after experiencing a sharp downturn last year.
CMHC senior analyst Anthony Passarelli told The Spectator that Hamilton home prices have likely already “bottomed out” and are forecasted to start trending upwards this year as sales activity makes a return.
However, Passarelli noted that price growth will be more restrained than during the pandemic, when demand skyrocketed as mortgage rates fell to historically low levels.
That all changed in March 2022, when the Bank of Canada began hiking interest rates for the first time since October 2018. The market continued to cool as rates went up eight times between then and January 2023 to 4.5 per cent, but they have since held steady.
“We don’t see price growth like we saw in the last few years,” said Passarelli. “We think prices will recover, but at a slower pace.”
In Hamilton, the latest report from the federal housing agency — released Thursday — forecasts between 9,500 and 11,000 sales for this year, with an average price of $825,000 to $915,000. For 2024, the report forecasts between 11,800 and 13,800 sales in the region, with an average price of $840,000 and $970,000.
Passarelli said while the agency expects mortgage rates to stabilize this year, they are not predicted to drop to previous levels. While that steadiness will draw some back into the market, the overall level of housing affordability has eroded, he noted.
“Potential buyers are worse off because of the amount that rates have increased,” said Passarelli. “And it’s going to play into that slow recovery.”
The report also forecasts a decline in housing starts — a measure of when construction on homes begins — for Hamilton.
While between 3,600 and 4,200 homes are expected to start being built this year, that number will drop to between 3,000 and 3,800 in...[READ MORE]