If you grew up in Hamilton, you no doubt have seen many changes over the years. You would probably be surprised at the rental rate increase in just over a year as Hamilton was always the ‘cheap’ place to live in comparison to our Halton and GTA counterparts. The migration west in search of affordable housing has changed the landscape of the rental housing market. Hamilton rents have risen an outstanding 28 per cent since January of last year (2019) and continue to rise as we move through 2020.
It's no surprise that Hamilton has become very hot real estate market. It ranks No. 14 amongst 30 municipalities across Canada for having high residential rental costs. It has had one of the biggest price jumps in the past year for rents and as a result the concept of affordable housing costs may be a thing of the past.
The cities that have had the largest increase in Canada for rent increases are Montreal at 38% and London at 36%. These amounts are staggering in relation to the time frames in which the prices skyrocketed.
Historically, rent increased an average of 1.3 % per year described in most reports found on the internet.
According to Rentals.ca, Since January 2019 the average rental costs for 1 bedroom and 2-bedroom in Hamilton has risen 28% and 21.9% respectively.
Recent numbers show that from January 2020 to February 2020 a 1-bedroom unit has dropped ever so slightly by 0.09 % while a 2-bedroom unit has climber by 4% from January 2020 to February 2020. This translates out to the average rent for a 1-Bedroom in Hamilton is $1492 and the average price for a 2-Bedroom is around $1720. This may or may not include utilities.
These numbers are high for what we are used to seeing in the Hamilton area, however, they are unheard of in the GTA. These numbers would be considered a deal compared to the GTA which has the highest rental rates across the country. Geographically, the GTA alone is home to 9 out of the 10 most expensive spots for those looking to rent.
Ontario's rental rates continue to pass all other major provinces in Canada. The average 1 Bedroom is $2,200 per month in January 2020. Rent increases 6% year over year in Ontario
Below is a chart of the rental rates as of February 2020. As demand continues to outweigh the supply the rental costs do not seem to be levelling off anytime soon. As I write this blog, I think to myself and wonder where the rental rates will be in 2025. The past 5 years has brought massive change in this area, what will the next 5 years bring?????
I believe you're on the right track.
Hamilton is the cheapest GTHA city by a long shot. Builders have taken notice of the drastic changes under way, I encourage everyone to start running some searches to find all the development applications in downtown Hamilton, you'll be surprised to find some massive condominium and apartment complexes in the works. Naturally, this will place upward pressure on rents and sale prices when this new wave of inventory hits the market.
Note, with rents rising, low income and government supported households are leaving Hamilton for lower priced jurisdictions. This will have a positive impact on the city, gentrifying the parts that have good locations. At this time, Hamilton still feels and looks scummy when compared to Halton Peel York Simcoe etc, but that's where the opportunity is. Most importantly, the City of Hamilton is very supportive of investment, and has earmarked a lot of money for small time investors, I encourage you to look into tax credits and other incentives.
Beware that sellers in Hamilton are trying to cash in after years of under valued real estate prices, obviously they're getting a little greedy. Be vigilant with your comps and Bigger Pockets Calculators.
As a realtor, its very discouraging to working in Hamilton as the commissions % are lower and the prices garner peanuts compared to everywhere else, but as an investor, my money there is safe, even during market turbulence.