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The Hamilton condo boom has arrived

Brought to you by Forge & Foster Investment Management.

The Toronto condo boom that started in the 90’s has made its way to Hamilton.

For the past three years, Hamilton has seen an explosion in its demand for condominiums, both new and old.

According to data from the REALTORS® Association of Hamilton-Burlington (RAHB), since September 2017 the average price of apartment-style properties have increased from $290,575 to $377,004. That increase is equal to 22.9%, which is significant for a Hamilton real estate class that has seen very modest growth for the past two decades.

While this data is a strong indicator of the overall trend toward apartment-style living, what it fails to account for are the sales figures of pre-construction condominiums yet to be completed. This is because the data from RAHB almost exclusively deals with resale properties.

In the Hamilton region, there are at minimum 19 apartment-style condominium projects actively being constructed or selling. There are at least 7 more similar projects currently in registration.

From a city whose skyline has remained unchanged since the 1970s, the 2020s will be the decade Hamilton finally grows tall.

Much of the initial demand for increased housing in Hamilton began in the mid-2010s from Toronto-based families who were priced out of their local market.

As immigration fueled and continues to fuel steady demand for the Toronto metropolitan area, the fastest growing metropolitan area and city in North America, a spillover into surrounding communities forced many residents to travel down the QEW for a price and location better suited to their lifestyle.

The COVID-19 pandemic’s rise in work-from-home offices has opened up many new housing options for those that have GTA-based jobs who no longer feel the need to live close to their workplace. GTA homeowners are using the opportunity to cash out and relocate to nearby cities where their dollar goes farther.

For renters paying over $2,000 per month in rent for a one-bedroom apartment, Hamilton’s average price of $1,500 for the same one-bedroom is mighty attractive when commuting to work is a non-factor.

When looking at Golden Horseshoe cities that offer a lifestyle that’s similar to Toronto, the City of Hamilton truly stands out. It offers historical charm, a vibrant restaurant scene, nightlife, rec centres — all amenities Torontonians are used to and would expect, just on a smaller scale.

Hamilton is also home to the Niagara Escarpment, which has created a network of trails, waterfalls, and outdoor amenities — features many residents of the GTA find persuasive after living amongst busy streets of concrete and glass.

But as is the case of all growing cities, there comes a time when demand exceeds supply and the notion of everyone owning a detached home is no longer feasible. Limited land and the need to be in close proximity to amenities necessitates high-density towers. There’s no way around it — condominium towers are the best answer in accommodating the swaths of incoming residents to Hamilton.

When asked why condo living has become so popular, Rudi Spallacci Jr., Project Manager of Spallacci Group and developer behind the Residences of the Royal Connaught, said that he believes people are looking at ways they can simplify their lives. 

“I believe some people like the convenience of not having to maintain and clean their own yards, I believe some people enjoy having amenities at their doorsteps (gyms, theatre room, party room, outdoor skydeck) without having to drive to those amenities if they live in a home,” said Spallacci. “Not having to drive long distances to run errands or do the things you enjoy simplifies a person’s life.”

On a price per square foot basis – the most commonly used metric of an apartment’s value – the argument is even more compelling.

As of September 1st 2020, there are exactly 247 condominiums in Toronto with an average price per square foot of $1,000 or higher with average prices maxing out at $1,876 per square foot.

Now compare that to Hamilton where the most expensive condominium – 101 Locke Condos – sell on average at just over $800 per square foot, according to recent RAHB stats. This building in particular began its occupancy mid-2019, making it a healthy benchmark for luxury apartments in Hamilton.

The GTA area as a whole averaged $1,108 per square foot in 2019, for comparison. That may indicate that Hamilton is severely underpriced relative to it’s 416-area code counterparts.

In Hamilton, the stretch of King Street E between Wellington Street and James Street has particularly caught the attention of many developers. Along this corridor (or very nearby) can be found the construction sites of KiWi Condos and 1 Jarvis right beside it (currently in review), Residences of the Royal Connaught Phases 3, 4 and 5, Cobalt Towers, Gore Park Lofts, and The Connolly.

Further west at the corner of King & Queen Streets is the site of Coletara’s new 24-storey Platinum Condominiums with Vrancor’s new hotel and residential complex located at the opposite corner. South of this site is Brad J. Lamb’s upcoming Television City condos on the site of the former CHCH headquarters, originally planned to be a 40-storey and 30-storey tower, now revised to be two twin 32-storey towers.

Over the course of the next decade, a community at Pier 8 will slowly take the shape of the winning development Waterfront Shores, which will completely overhaul the city’s waterfront premiere waterfront destination to an area filled with residential, commercial, and recreation all in one. The plans call for 1,292 condo units including 65 affordable housing units spread across 20 buildings. The harbourside community will have themed street-level retail while ensuring that each building is architecturally diverse. 

Toronto has set a high watermark for how expensive condos can rise, and as more people discover the amazing quality of life Hamilton has to offer, it won’t be long until we too pass that $1,000 per square foot benchmark.

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