Analyst predicts modest decline in Hamilton area real estate sales

Analyst sees a drop of up to six per cent, but fourth quarter will rebound

Canada Mortgage and Housing Corp. is predicting a two- to six-percent drop in real estate sales in the Hamilton housing market this year.

CMHC market analyst Anthony Passarelli told a gathering of Realtors Wednesday the Hamilton market has been volatile, with a 22-percent decline in sales in the third quarter, but he expects improvement in the fourth quarter.

The numbers compare this year’s figures with an average of the last five years.

He said the third-quarter decline in sales — it was preceded by a second-quarter drop of six per cent — may be partly explained by the provincial government’s Fair Housing Plan.

The plan brought forward in the spring implemented a series of measures to try to make housing more affordable, including a 15-percent tax on foreign speculation.

Passarelli said the government initiative “definitely changed the psyche of buyers. Their expectations changed.”

With the implementation of the government initiative “you definitely saw buyers moving to the sidelines.”

His analysis predicts this year will end with between 13,500 and 14,100 sales in the Hamilton Census Market Area compared to 14,826 last year.

In 2018, he believes, sales will be two to 11 per cent less than the fiveyear average (between 12,800 to 14,100).

The second and third quarters also saw a rise in new listings, with a 17-per-cent jump in the second quarter and a seven-per-cent increase in the third.

Passarelli said the increase in listings is helping to turn the local market into a more balanced one.

The Hamilton market for the past several years has been characterized as not having nearly enough housing stock to meet buyer demand.

Second- and third-quarter declines in real estate sales are expected to be offset by a stronger fourth quarter, but 2017 totals will still fall slightly short of the previous year.

However, he believes that the fourth quarter will rebound.