Hamilton less affordable for home buyers

Hamilton has become one of the most difficult cities in Canada to afford to buy a house, according to a new survey from an online real estate analysis company.

The survey — comparing average selling price to median income — ranked the Hamilton area (including Burlington) as the sixth worst community in the country to buy a home, saying it would take 15 times the annual median income of $36,460 to pay for an average priced home of $552,661.

Mark Bernhardt, of Zoocasa — a Canadian real estate website and brokerage based in Toronto — says the finding is significant because economists say three times an annual salary is the usual affordability benchmark for people buying a home.

“We found that nationwide that is impossible. You need at least four times your income to buy,” he says.

Vancouver was rated as the worst place to buy a house. It would take 28 times a median income of $38,164 to afford to buy. Toronto came in third with 19 times a median income of $39,560.

On the other side of the spectrum, the survey found Saint John to be the most affordable city, where it would take four times the median income of $39,163 to manage the average price house of $171,596.

According to the Realtors Association of Hamilton-Burlington, the average sale price — in Hamilton, Burlington and Grimsby — rose by 14.6 per cent last year, with the average reaching $569,285. Hamilton alone had a 16.3 per cent increase with the average price reaching $496,560. (That figure compares with a recent report from Royal Lepage that found a 22.9 per cent increase over 2017 with the average price in Hamilton reaching $554,399.)

Jack Loft, the president of the realtors association, says Hamilton is still vastly more affordable than the Greater Toronto Area.

“I think there is great value in homes in Hamilton. I think Hamilton is still very affordable, especially when we compare to areas outside our region,” he said.

Bernhardt says Hamilton’s ranking in the survey is largely attributable to spillover demand from the Greater Toronto Area.

“There is a mentality among Toronto buyers that they will drive until they can afford it. So they are looking at places like Hamilton and Guelph within commuting distance. And that in turn is driving up property values,” he says.