Toronto buyers fuel hot Hamilton real estate market

James Schwartz is a well-known bicycle advocate in Toronto who is frequently seen riding around on his $2,500 Dutch cargo bike.

But when he decided he wanted to make a real estate investment, he looked far beyond the streets of TO. He considered Buffalo, Mississauga, Edmonton and several other cities.

But nowhere did the numbers look as good as they did in Hamilton, he says.

So he ended up buying a condominium for $268,000 in the FilmWork Lofts building at Catharine and King William. The building is a former printing site for The Spectator.

"A condo like that in Toronto would have cost $650,000," says Schwartz, who owns a technology company and attended Mohawk College 15 years ago.

"In my opinion downtown Hamilton is gentrifying. There are lots of hipsters and all kinds of people from Toronto moving to Hamilton because it is more affordable."

The sale closes on March 1. He plans to do a quick fixup and then rent it out for $1,400 to $1,500 per month. He says he'd like to move to Hamilton but for family reasons he needs to stay in Toronto.

Everyone talks about Torontonians moving to Hamilton, buying houses and commuting to Toronto where they continue to work. But there are others from that city who are staying there and buying up investment properties here. They like the prices and believe they will get a good return on their investment, years in the future.

George O'Neill, CEO of the Realtors' Association of Hamilton-Burlington, says the role of Toronto investors is a great unknown in the marketplace because no accurate records are kept about the intentions of buyers.

But he says investors — particularly in the downtown — are definitely adding to the high demand for Hamilton properties, a demand being met by a lack of properties on the market.

O'Neill says January saw the lowest number of new listings in 10 years. There were 1,248 properties listed — a decrease of 14.9 per cent compared to January 2015. Normally it takes four months for the association's inventory to turn over. Now it's taking three months, he says.

It's driving prices upward as well.

Real estate prices in Hamilton jumped by 9.7 per cent in 2015 compared to the year before, about the same percentage increase as in Toronto.

However, the average price of a house in Hamilton is still far lower. End of year figures from the RAHB listed an average price of $383,602 compared to $622,217 in Toronto.

content courtesy thespec.com

Brandon Jones

Brandon Jones

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
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