Photo: James Bombales
One of the questions I get asked more often is: What is the next hot market? In 2010, I said Toronto’s downtown east — it made no sense to me that projects a ten minute walk east of Yonge Street were selling for $475 per-square-foot, while projects in the west end were selling for over $600 per-square-foot. I could see that the Regent Park revitalization, expansion of Ryerson University, transformation of the West Don Lands and the waterfront, and popularity of the Distillery District would help boost values. Sure enough, sites in the east end that developers wouldn’t have looked at eight years ago are now selling at $1,000 per-square-foot.
When people asked me the same question in 2015, I said look out for Vaughan. A subway station is a huge driver of demand, and once investors and end-users knew it would be completed before they took possession of their units, sales took off. Now every site in the “City above Toronto” is selling at over $700 per-square-foot.
What market am I excited about in 2018? Hamilton. Bullpen Consulting and BuzzBuzzHome have launched The Residential Real Estate Round Up, a new report which looks at big data generated via the millions of hits received on BuzzBuzzHome every month. The December issue, which we sent out for free (download it here), found that Hamilton was the fourth most popular municipality in the Greater Golden Horseshoe for would-be new condo buyers. The January report shows that it is now the third most popular, with pageviews increasing by 44 per cent month-over-month.
When I started my new company in January, three of the first four developers that contacted me about my consulting services were asking about sites in Hamilton. About 12 years ago I worked on a study for the City of Hamilton — they were looking for guidance on incentives to offer developers to entice them to build condominium and rental apartments downtown. I remember picking up the price sheet for a conversion loft, and finding that it cost about $150,000 for a 1,000 square-foot hard loft. But that was before Torontonians discovered Hamilton. Things are much different now — neighbourhoods are gentrifying, and condos are selling fast.
According to the Round Up report, the average condominium project in Hamilton is 11-storeys tall, with units ranging from 590 to 1,490 square-feet, priced from $295,000 to $455,000. It’s nothing like the $150 per-square-foot loft I looked at before, but these more affordable condos have attracted buyers simply because of their price point. Toronto-based investors are looking elsewhere as prices top $1,100 per-square-foot for a downtown Toronto unit. Because Hamilton is a city and not a suburb, priced-out artists are heading to the steel town for its history and its walkability. Expect plenty of articles using the phrase “Queen West vibe” in the coming years, as creative and cost conscious millennials reshape downtown Hamilton.
Right now there is a very wide range of condo unit types for sale in Hamilton, with Canada’s Big City Broker, Brad J Lamb offering a 369 square-foot studio for $232,000 and a 2,028 square-foot unit for $1.49 million in his Television City project (see chart below). Lamb isn’t the only major Toronto developer scoping out Hamilton — If you’re looking for the next hot area, this is it.
To purchase a subscription to The Residential Real Estate Round Up Report, go here.
Ben Myers is President of Bullpen Research & Consulting, a boutique real estate advisory firm, that works with land owners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects. Follow Bullpen on Twitter at @BullpenConsult or find Ben at www.BullpenConsulting.ca.