• I was enjoying my breakfast this Saturday reading the weekly real estate listings in the Hamilton Spectator when I caught myself shaking my head. Some of the prices for homes in some neighbourhoods were just goofy. At Robert Floris’ Hamilton Mortgage Architects office, we try to share our thoughts as if roles were reversed and we were to be the reader. Today, we will share our thoughts on home prices, not only in Canada but in the Hamilton area.

    The overall average price in Canada rose to $508,500. The real startling statistic is that this was a 15.7% increase from a year ago. Could this continue? Well considering that between February and March, the house price index rose .08%, this is a scary thought. More locally, the average price for a Toronto home was $439,000 ten years ago. Today, the new GTA median cost for a dwelling is $1,049,000. Thus, prices have more than doubled in the last ten years.

    As for Hamilton, our average home prices increased year over year by 10%. If this continues, we would be on pace to double our median price in just seven years. Is this sustainable? My gut says no. We do know the Hammer’s increase is due to several factors:

    The influx of Toronto residents finding our residential prices so attractive
    The fact that as mortgage rates have gone lower, our affordability goes higher
    The fact that the bank is paying virtually nothing on our deposits. Hamiltonians and investors want a better use of their money.

    I really get nervous for our fellow Hamiltonians and Canadians when I feel this housing market is getting goofy. Income levels for Canadians have not kept up to median increase of home prices.

    How can this end? I hope well. I remember all too well the late eighties and early nineties where the economy and several Canadians suffered. It was goofy then as well.

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