Are Torontonians driving up house prices?
Everyone knows that Torontonians are coming to Hamilton in droves and pushing home prices sky high.
Now, Hamilton has become the sixth worst community in the country to buy a home (The Spectator, March 2018).
Where affordability is measured with a home-price-to-income level of 3:1, because of you Toronto, Hamilton is now unaffordable to many, with a home-price-to-income level of 15:1 (6:1 in a two-person household).
Here’s what the professionals are saying:
Abdul Kargbo (Market Analyst with CMHC) states, “Slightly over 30 per cent of homes sold in the Hamilton CMA (Burlington/Hamilton/ Grimsby) are purchased by Torontonians.
Broker of record Conrad Zurini calculates that 23-27 per cent of home purchasers in Hamilton are from Toronto.
Realtors Association of Hamilton-Burlington (RAHB) past-president Lou Piriano says it is 15 per cent (including Burlington sales).
Broker of record Judy Marsales states, “All the hype you hear about Toronto coming to Hamilton is just that — hype.”
Er, wait a minute. These professionals are all over the map.
Is Toronto buying us up or not? Given the diverse opinions, it’s a reasonable question to ask.
So here’s the challenge to the real estate professionals in Hamilton:
In the name of integrity and accountability, come up with a unified and verifiable message about Torontonians buying homes in Hamilton.
And in that message, please define Toronto and define Hamilton so we are all on the same page.
If you can’t do this as real estate professionals, please shut it down. How’s that for a rant? Meanwhile, here’s my best stab at trying to verify how many Torontonians are moving to Hamilton. I chose 2016 for study as it was the hottest of hot markets and therefore most likely to yield verifiable data. The results are as follows:
• 8,925 homes sold in Hamilton in 2016 (RAHB).
• About 64 of those homes had students from Toronto enrolling in our dual school boards. This represents less than one per cent of all homes sold that year.
• No significant congregation increases from Torontonians in downtown Hamilton churches in 2016.
• Hamilton GO bus and train service to Toronto had 72 (not a typo) new morning commuters in 2016. Even if we unrealistically attribute all 72 to Toronto home buyers here in Hamilton, it represents less than one per cent of the 8,925 homes sold.
• MOT traffic stats at Highway 403 and York Boulevard showed an average daily increase of 150 round trips per day over 2015. Even if all of the round trips are attributed to newly-located Torontonian commuters, that would represent less than two per cent of houses sold in 2016.
• According to census figures, commuting to Oakville, Mississauga and Toronto from Hamilton increased by 1.47 per cent (again not a typo) in the five years from 2011-2016. When averaged out, this represents a total increase of 247 car, bus and train riders to Toronto in 2016 (a little more for each of Oakville and Mississauga). If we attribute the entire 247 to landed Torontonians here in Hamilton it would represent about three per cent of homes sold.
The above data suggests the possibility of hyperbole going on in the real estate industry. If that’s the case, it lacks integrity and the exaggerations should stop immediately. Hamilton home buyers have it tough enough without the false spectre (if indeed that is the case) of Toronto hanging over their heads.
Therefore, my question for the real estate professionals is:
Have some of your members been over the top with assertions around Toronto buying up Hamilton? And if so, what have you done about it?
Moving in a different direction, if we entertain at least the possibility that Torontonians are not the main driver in the huge increase in Hamilton house prices over the last decade, what is?
Wendell Cox, a leading global authority on affordable housing, is a senior fellow at the Frontier Centre for Public Policy and says he knows the answer.
He says here in southern Ontario, “growth boundaries are destroying housing affordability. The market is rigged by provincial policy, especially the greenbelt policy imposed more than a decade ago. Greenbelts drive up land prices throughout a metropolitan area.”
As a result, he says that “in places like Toronto, Hamilton and Kitchener-Waterloo ... middle-income and young households ... have been priced out of the market.”
Hmmmm. Not as emotionally satisfying as blaming Torontonians. But until I get data to the contrary, I’m going with Mr. Cox’s analysis.