Many Hamiltonians have been completely iced out of the housing market over the last few years and it’s only gotten icier since the pandemic.
It’s not uncommon to hear stories about a $600,000 home in Hamilton receiving 12 bids in the first 12 hours and selling for $200,000 over asking.
Many from the Toronto-area are seeing their new job flexibility that includes working some or all of their days from home as an opportunity to relocate to a comparatively cheaper market. There have also reportedly been an influx of investment groups buying up property at way-above market value, further driving prices to exorbitant levels.
So with that, let’s take a journey to the year 1947.
The 19th Academy Awards were hosted by Jack Benny; the Toronto Maple Leafs won the Stanley Cup (LOL) by defeating the defending champion, Montreal Canadiens 4-games-to-2; and Canada repealed a law that made it so a woman would automatically lose her citizenship if she married a non-Canadian.
Also, you could buy a nine-room home in Hamilton for $7,200.
A Reddit user by the name of “AssEatinSeazn” (LOL, again) posted a photo from what they say is a newspaper from 1947, featuring real estate ads in Hamilton.
HOUSE for sale. 9 rooms, hardwood floors, good furnace, new garage and driveway, Price $7,200. Apply after 6 o’clock at 278 Rosslyn Ave. N. Early possession.
Let’s do the math and compare 1947 to 2021, shall we?
(Keeping in mind I went all of grade five thinking any number multiplied by zero equalled one…)
Pricing the real estate market is complex and can’t be translated simply by calculating by inflation, but, for simplicity-sake, according to the Bank of Canada, $7,200 in 1947 is equivalent to $89,124.32 today.
According to HouseSigma.com, a four-bedroom, two-bathroom home on Rosslyn Ave N. now would fetch an average of $540,280–which would be considered to be on the “cheap” end of Hamilton’s real estate prices. According to Remax, the current average cost of a home in Hamilton is $646,667.
In around 1947, the average Hamilton salary was about $2,300 per year. In today’s dollars, that would be around $27,000.
The actual average income in Hamilton now is around $33,000.
In other words, a house in 1947 would cost a single person about three-times their annual salary. In 2021, the average home will cost the average person nearly 20-times their salary. Factor in the required down payments, stress tests, and taxes, and that number seems even larger.
What’s the point of all this?
Just that real estate, especially in Hamilton, is expensive.
Which you already knew, but now you have figures to show your grandfather the next time he mocks your generation and tells you to “pull yourself up by your bootstraps” and “figure it out” the way he did… in 1947.
Home sales, average price decline in April from March
Home sales fell 12.5% in April from March, with the average selling price also declining slightly on the month, data from the Canadian Real Estate Association showed on Monday.
The actual national average selling price was C$696,000 in April, falling 2.9% from March but up 41.9% from a year earlier as it was compared with a sharp decline in April 2020 amid the first wave of COVID-19, the industry group said.
Actual sales, not seasonally adjusted, rose 256% from a year earlier, while the group’s Home Price Index was up 23.1% on the year and up 2.4% from March.
(Reporting by Julie Gordon in Ottawa; Editing by Andrew Heavens)
Canada housing starts fall 19.8% on month in April
The seasonally adjusted annualized rate of housing starts fell to 268,631 units from a revised 334,759 units in March, Canada‘s national housing agency said. Analysts had expected 280,000 unit starts in April.
(Reporting by Julie Gordon in Ottawa; Editing by Gareth Jones)
Towns grapple with big-city-like real estate boom
Small cities and cottage towns across Canada are grappling with the fallout of surging popularity amid the COVID-19 pandemic, as urbanites flock in, driving up home prices with big-city-style bidding wars and putting pressure on municipal services.
The growing demand has led to some small Canadian communities seeing house prices jump more than 75% in one year.
“The small towns are getting hit hard. They’re getting interest like they’ve never had before,” said Stephan Gauthier, an Ottawa real estate agent who is increasingly helping clients buy in villages well outside the city. (Graphic: Annual price gains in select Canadian cities and towns,)
The eye-watering gains in Canada are mirroring similar trends in New Zealand, Australia and Britain, where rural home prices are accelerating faster than in cities as avid buyers rush to snatch up cheaper small-town properties and as white-collar workers bet on being able to work from home even after the pandemic ends.
The boom in Canada has builders flooding into smaller communities. More homes mean more demand for drinking water and wastewater treatment, forcing some towns to fast-track expensive infrastructure projects.
For locals, the influx of city people is a double-edged sword. New residents are breathing life and diversity into places where – before the pandemic – schools were closing and many businesses struggled through the winter.
But the soaring housing prices are locking locals out of the real estate market, and competition for rentals means many people can no longer afford to live locally, leaving small-business owners scrambling for staff.
Even existing homeowners, whose home values have risen sharply, are unable to move up the property ladder as the gap to the next rung widens past their means.
“You want people to come here and help build the community. But at what cost to the people who have been here for literally generations?” said Nancy Cherwinka, who lives in Prince Edward County, a peninsula in Lake Ontario known for its wineries and beaches.
MOVE TO THE COUNTRY
Roughly 75,000 people left Toronto and Montreal – Canada‘s two biggest cities and main COVID-19 hot spots – for other parts of their respective provinces of Ontario and Quebec in the year up to July 2020, the largest such migration since at least 2001, according to the latest Statistics Canada data.
For Prince Edward County, about 200 km (125 miles) east of Toronto, that migration has helped drive house prices up 78.5% on the year, putting ownership out of reach for many local residents. The average selling price of a home there in April was C$740,112 ($610,000).
“Now the rental market has gone nuts,” said Chuck Dowdall, executive director of the Prince Edward County Affordable Housing Corporation, with potential home buyers giving up on buying, and renting instead.
The rental crunch is making it difficult for small businesses to hire and retain staff, even if they pay above minimum wage.
It is a struggle that Samantha Parsons and her husband, owners of Parsons Brewing Company, know well. They built a small bunkhouse next to their brewery to house workers temporarily and have even had staff stay with them. This year, they arranged a lease for a three-bedroom home for employees.
“You have to be creative,” said Parsons, adding they still lose out on talent because of the housing challenge.
IF YOU BUILD IT
To tackle the housing crisis, Prince Edward County is planning for more than 3,000 housing starts through 2026, including dozens of below-market rental units.
That boom is putting pressure on municipal services, notably aging water infrastructure. The region is hastening plans to spend C$68 million ($56.2 million) on its water and wastewater system, with developers on the hook for much of the bill.
New-home construction is also surging in other smaller centers across Canada, with rural starts in the first quarter of 2021 at their highest point since 2008. (Graphic: Canada rural housing starts, )
In Collingwood, Ontario, a four-season resort town about 145 km (90 miles) northwest of Toronto, the population boom has forced the community to pause all new-home construction while it sorts out how to address its critical water shortage.
In Nelson, a former mining town in British Columbia’s Kootenay mountains, a pandemic-driven explosion of infill and coach housing is forcing the small city to expand its wastewater and water infrastructure sooner than planned.
“We were heading down that road anyway … but now it’s been accelerated. So that’s going to put us a little bit on our back foot,” said Mayor John Dooley, adding that the sewage treatment plant alone will cost about C$25 million.
Dooley said Nelson hoped to split the costs with the province and federal government.
Back in Prince Edward County, about half the children at a rural daycare are new to the community since the pandemic. At the sister daycare in town, a quarter of students are newcomers. Enrollment at local schools is also up, reversing a trend that had led to closures in previous years.
More young families living in the community will ultimately be beneficial, said Cherwinka, as long as they stick around once life goes back to normal.
“Hopefully they stay, hopefully it’s not just a pandemic solution,” she said. “Hopefully it’s long term.”
($1 = 1.2092 Canadian dollars)
(Reporting by Julie Gordon in Ottawa; Additional reporting by Andy Bruce in London; Editing by Peter Cooney)
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