How this Canadian city became the third least affordable real estate market in North America

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House for sale through a realtor in Hamilton, Ontario, Canada on May 13, 2017.  Photo taken on May 13, 2017.  REUTERS / Chris Helgren

House for sale through a realtor in Hamilton, Ontario (REUTERS)

When it comes to high home prices, Toronto and Vancouver tend to get the most attention. They were recently ranked # 1 and # 2 on Oxford Economics’ list of Least Affordable Real Estate Markets in North America. But they have company.

Hamilton, Ontario has quietly become the third least affordable – even more expensive than US cities known for high housing prices such as New York and Los Angeles.

The rise in house prices in Hamilton is largely due to people who are valued outside of Toronto looking for more affordable options – a trend commonly known as “move until you qualify.” Another factor is housing supply that has not kept pace with immigration.

New research by Smart Prosperity Institute found that Ontario added 80% of residents in 2015-2020 compared to 2010-2015, but 2,598 fewer homes were built in the Hamilton metropolitan area (CMA).

“Hamilton is exceptionally well positioned to grow nearly 40 percent from 584,000 to just over 820,000 over the next three decades,” said Mike Collins-Williams, MCIP, RPP, CEO of West End Home. Builders Association.

“This projected growth presents both challenges and opportunities for our region, and it is imperative that we plan the necessary housing supply to ensure Hamilton is up to the challenge, and we will not be exposing the next generation of Hamiltonians to the housing they fits. full life cycle needs “.

Also see: The latest real estate news: home prices, mortgage rates, markets, luxury real estate and more from Yahoo Finance Canada.

Price does not depend on Hamilton property

And now the problem is on its feet, because research shows that the lack of affordable housing is forcing people to leave Hamilton, too, and these are mostly young people.

It turned out that between 2015 and 2020, 13,000-15,000 residents left the Hamilton community due to housing shortages. Between 2016 and 2019, over 10,000 people traveled to St. Catharines Niagara, Brantford and rural Ontario.

Not being able to live in the city in which a person works, or close to friends and family, is a daunting task for home buyers. This is costing the city millions in lost tax revenue. But Mike Moffatt, senior director of policy and innovation at the Smart Prosperity Institute, says there are other, less obvious effects.

“Hamilton is a vital hub for green technology innovators, but too many working families are struggling to find a place in a community to call home. By creating enough housing, we can help families live closer to their jobs and ensure that local businesses can attract and retain the talent they need, ”Moffatt said.

Jesse Baines is a senior reporter for Yahoo Finance Canada. Follow him on Twitter @jessysbains

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