Can Hamilton Still Afford Hamilton?- A Conversation with Bob Van de Vrande

The Hamiltonian is fortunate to feature Bob Van de Vrande of Casora Realty Inc. to discuss Hamilton and the real estate market. Enjoy our chat with Bob. 

Looking at Hamilton’s real estate market today, what would you say is the biggest misconception the public has about housing in our city?

Ironically, I think the biggest misconception is that housing in Hamilton is inexpensive. While prices may be at a somewhat lower average than surrounding communities, in general housing in Hamilton is not inexpensive. Of course, this varies by neighbourhood, but when mortgage payments, municipal taxes and condo fees (when applicable) are considered, Hamilton is not much more affordable than other cities.

Has Hamilton fully recovered from the market correction of the past few years, or are we still in a transition period?

If you mean, “Are prices back to previous levels?” then no, Hamilton and most other cities have not recovered from the market correction of the past couple of years and it may be some time before we see a full recovery of prices. Prices during Covid rose far too quickly and the correction following that was to be expected. 

What are you hearing most often from buyers right now that you weren’t hearing five years ago?

I believe that the most frequent concern amongst buyers is whether prices will continue to decline. While prices may be more attractive for buyers now than during 2021-2023, they are wondering if they will drop even further. Buyers’ overall lack of confidence in the economy and disenchantment with all levels of government are in my opinion the most important reason why many would-be home buyers remain hesitant to enter the market. The significant reduction in real estate investment buyers also has a major impact on the market. This is due to numerous factors and can largely be laid at the feet of governments, in this case federal and provincial.

For young families trying to enter the housing market, what are the biggest barriers they face today?

Qualifying for mortgages, even at today’s prices, remains the largest barrier as incomes often do not support the monthly payment requirements. Other debt held by buyers also seriously impacts their ability to buy as does the level of municipal property taxes, all of which are factored into the mortgage qualification ratios. 

How has the affordability crisis changed the way people approach buying and selling homes?

In general, it appears that people are simply opting to stay out of the market. This not only due to affordability but it is certainly an important factor.

Hamilton has experienced significant population growth. Has our housing supply kept pace, or are we falling behind?

This is a very difficult question to answer and there may not be a real answer. For years we have all heard about the “housing crisis” but few people can actually define what the crisis is. In some ways I think it is more of a headline than an actual description of the current situation. If there were actually a shortage of homes, then there should be more demand in the market, and we would see prices rising or at least stabilizing. This is clearly not the case. If there is an issue it is one of affordability, but I don’t even accept this as a crisis because in a normal market the level of supply and demand determines prices. If there is indeed a crisis it is a crisis of confidence, namely a lack of confidence in the economy, a lack of confidence in our governments and a lack of confidence in what is happening in the world.

What impact have rising development charges, taxes, and municipal fees had on housing affordability?

All of these taxes, development charges and other fees directly impact the cost of construction, all of which are passed on to home-buyers. Development charges have increased dramatically over the past two decades and municipal taxes in Hamilton have always been too high, especially when considering the level of service and the state of the city. 

Are Hamilton’s elected officials doing enough to encourage housing development while protecting established neighbourhoods?

Absolutely not. While some processes have been streamlined and are actually better than in neighbouring Burlington for example, there is still far too much red tape, too many fees at too high a level, and too many barriers to efficient development and construction. Red tape needs to be significantly reduced, zoning needs to be re-examined and elected officials need to hold municipal staff and themselves accountable for results. Currently there is little or no accountability and this affects the city with respect to all aspects of living in the city.

What neighbourhoods in Hamilton do you believe are most poised for growth over the next decade?

Hamilton as a whole has tremendous potential for growth and improvement if citizens elect a mayor and council that is willing to make bold decisions, be accountable and find a way to cut municipal taxes. (even holding steady is not sufficient, they must be reduced). Downtown and older areas of the city stand to gain the most if the seedy elements can be addressed but this will take courage and leadership well beyond what we have seen over the past 30 or more years.

Is the dream of homeownership becoming unattainable for a significant portion of Hamiltonians, and if so, what needs to change?

I do not believe that the dream of homeownership is becoming unattainable. Ultimately markets will adjust to what people can afford. It will be up to city council to decide if Hamilton will be part of a recovery in the market or it will be left behind by cities and towns with better leadership and governance.

How have higher interest rates changed buyer behaviour, and what trends are you seeing as rates begin to stabilize?

Interest rates directly affect buyers’ ability to buy at a certain price level. Rising rates mean that buyers qualify for a lower mortgage and thus a lower home price. As interest rates stabilize at lower levels this brings back a greater ability for buyers to purchase. However, for this to be meaningful, buyers must also have confidence in the market and economy, or they will continue to avoid making major purchases. 

What role should government play in addressing the housing shortage, and where do you think governments have gotten it wrong?

I do not believe that there is a housing shortage. There is a shortage of leadership and affordability. Government policies like foreign buyer bans, HST rates, development charges and the like have dramatically impacted the markets, often in ways that were never intended when these policies were introduced. In my opinion government needs to set realistic zoning regulations and actually enforce bylaws and then get out of the way. 

Hamilton has invested heavily in intensification and higher-density development. Do you believe the city has struck the right balance?

I wouldn’t call it investment but certainly Hamilton, like other municipalities, has opted for higher density to provide more housing units. Ironically, many buyers are now shying away from the very small units created by these policies due not only to lifestyle choices but also due to the unreasonable condo fees and municipal taxes relative to what they are getting. 

How important is the proposed LRT to the future value and development of Hamilton real estate?

The LRT would have a positive impact but only if other issues like homelessness, decay and municipal taxes are addressed simultaneously. Not to be too negative, but a beautiful rail system running through a decaying downtown brings little value to anyone and tremendous costs to everyone.

What are the biggest opportunities and risks facing Hamilton’s housing market over the next five years?

Hamilton has wonderful neighbourhoods, suburbs, parks and amenities, and absolutely stunning architecture especially in the older parts of the city, all of which can be further enhanced to allow Hamilton to rise to its full potential. The opportunities to attract residents from other parts of the province and country are many but this will require leadership and meaningful goals that have been absent for too long.

How has the rise of remote and hybrid work changed housing demand patterns in Hamilton?

Opportunities to work from home have certainly made Hamilton a more attractive place to live for those whose work locations previously required extensive commutes. This will likely continue to be the case going forward.

What advice would you give someone considering downsizing but hesitant to enter today’s market?

I have always advised clients to make their move when the timing is appropriate for them and their family. Timing the market is next to impossible and it is preferable to make the best decision possible at the appropriate time than to try and predict the future. 

If you were advising City Hall, what three actions would you recommend to improve housing affordability and availability?

Re-examine development charges, reduce property taxes, introduce measures to make council and staff accountable for results. I should also mention term limits but that would require a much longer discussion.

Looking back over your career, what has been the most significant transformation you’ve witnessed in Hamilton’s real estate landscape?

During the almost 40 years I have been in real estate I have seen Hamilton become the bedroom community for those working in a very wide area reaching from Niagara to Toronto and beyond. As heavy manufacturing industries have been replaced by healthcare and other service based businesses, Hamilton has attracted an even more educated and diverse population, and this will likely continue into the future. Offsetting this has been an overall decay of the downtown area and a rise in the popularity of neighbourhoods on the mountain and in the suburbs.

If we were having this conversation ten years from now, what do you think Hamilton’s housing market and city will look like.

That will depend entirely on what kind of individuals and leadership are elected by the citizens of Hamilton. In my opinion, wholesale change and new ideas are required. If the right people take the reins, then Hamilton’s future can be bright. If we get more of the same, then we cannot expect any different outcomes. The alternatives are stark and I can only hope that citizens opt for a bright future with real leadership that both recognizes this potential and brings forward policies and sets goals to work towards such a future.The Hamiltonian often hears concerns about taxes, infrastructure, homelessness, transit, and overall quality of life. 

To what extent do these broader municipal issues influence real estate values and buyer decisions in Hamilton?

The issues you note certainly have a huge impact on the decisions made by buyers, especially those who may be considering a move to Hamilton. The very high rate of municipal taxes directly affects affordability and continues to put a damper on Hamilton house prices throughout the entire city. Homelessness and the physical appearance of certain areas, especially, but not limited to, the downtown may discourage out of town buyers from even considering Hamilton as a place to live despite the many positive features the city offers and the amazing architecture and neighbourhoods available throughout the city.

Thank-you Bob for engaging with Hamiltonians on The Hamiltonian! To visit Casora Realty Inc. .  click here.