Hamilton Home Review, February 2018 Edition

We’ve re-launched Hamilton Home Review, this time focusing on investors, especially those who are members of Venture Property Investments. I have been acting as the RE Liaison with Martin and Chris of Venture for about a year now and this is how we keep in touch with our clients, new members, and past owners.

If you click this link, it will take you to the most recent edition

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Major lenders hike rates following Bank of Canada decision

Businessman presenting chart

Canada’s major banks have been quick to react to the Bank of Canada’s decision to raise interest rates to 1.25%.

CIBC, RBC, Scotiabank and TD were among the first lenders to increase their prime lending rates by 25 basis points to 3.45%; the new rates take effect from today (Jan 18) more

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Government thinks these measures will cool the hot market. Are they aiming at the right places?

As a REALTOR, part of me wants to see the gov’t do something about escalating prices. But the other side of me has investors who are paying too much for homes, then being forced to pass it on to renters with higher initial rents. Capping increases will help, yes, but what about the high starting rent? And these investors aren’t foreigners, their Toronto investors coming to Hamilton. Conrad Zurini (Remax) said today on radio that Hamilton has been undervalued for years and that some of these prices are accurate. But the banks don’t agree since they don’t appraise them for the amount we’re paying in bidding wars.

What’s the answer? Anybody’s guess. We’ll see what they actually do. In the following article, the gov’t is hinting at dealing with REALTOR practices (big surprise), as well as foreign investment. I don’t think they’re aiming in the right direction. Shouldn’t banking practices be brought into play also? After all, they are the industry making the most money in this environment.

Here’s the article: http://www.repmag.ca/business-news/ontario-to-place-15-per-cent-tax-on-foreign-buyers-to-cool-gta-housing-market-sources-224385.aspx

Housing issues won’t involve reducing the Greenbelt

Ontario Premier Kathleen Wynne says that as the province looks to tackle housing supply issues, it won’t reduce the Greenbelt lands.

She says the government is actually committed to expanding the Greenbelt, which is about 800,000 hectares of protected land that borders the Greater Golden Horseshoe area surrounding Lake Ontario.

Wynne says the Greenbelt is “like the lungs of this highly populated part of the province.”

 

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Hamilton home values increase by 19+%

Continued heat in the Toronto market has pushed Canada’s average house resale price to a new February record.

The Teranet-National Bank Composite HPI jumped almost 1 per cent from January, the largest rise in 18 years, while Toronto saw an increase of almost double the national average (1.91 per cent).

Toronto’s gain over 12 months was 22.95 per cent while the price index rose year-to-date by 2.74 per cent.

Hamilton felt the heat too with a 1.44 per cent rise in the HPI month-over-month, 19.71 per cent year-over-year, and 2.58 per cent year-to-date. Ottawa-Gatineau saw a 0.93 per cent rise for the month with modest gains over the year and year-to-date.

 

Cities densifying rather than sprawling

bungalow

Information from the latest Canada Census report are slowly trickling out and here’s an interesting development: urban density is more important than urban sprawl.

“What we’re trying to do, as many communities are, is really trying to stop or limit sprawl and densify the areas that we already have because we know infrastructure is expensive,” says Colin Basran, Mayor of Kelowna, BC.

We’re experiencing it here in Hamilton also. The City is being very cooperative in allowing investors to create basement apartments in bungalows–especially on the mountain–as this caters to densifying. Sure, Hamilton can grow outward, toward Brantford in one direction, Stoney Creek in another, and Flamborough in yet another. But sprawl demands new infrastructure whereas densifying requires, at worst, upgrading and expansion of existing infrastructure.

The census shows that 82 per cent of the Canadian population live in large and medium-sized cities across the country, one of the highest concentrations among G7 nations.

With Canada also projecting that the economy will require more immigrants in order to counteract the declining working-age population, many of these abodes will house people from other countries and cultures. Amalgamating them into an existing infrastructure is much easier than creating new communities that would, in all likelihood, become isolated versions of their homeland. And that is something Canada does not want.

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