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Burlington Housing Trends: Is the Market Still Hot?
Burlington sits at the southwest end of Lake Ontario, northeast of Hamilton, and is part of what is known as the Golden Horseshoe. Thanks to its location close to the GTA and Hamilton, Burlington has a robust economy and is primarily driven by the automotive and manufacturing sectors.
In 2021, Burlington City Council began the first steps to create a Housing Strategy aimed at developing creative and innovative solutions for housing issues, including the development of new housing: affordable housing, higher-density housing, and rental housing units.
Burlington has seen a lot of residents pushed out of the ownership market into the rental market. Data suggests that more people are viewing rental housing as a desirable option longer term and an expected 200 rental units will have to be added annually to keep up with demand.
Single-detached homes make up most of the housing stock in Burlington, which is also the most expensive to build and requires the most land. As people have a variety of housing desires, Burlington decision-makers are being asked to consider the need for diversifying housing options, including townhomes, mid-rise, high-rise, and alternative housing forms.
That’s for the future. What does the current real estate look like?
The average price of a home sold in Burlington is $1.3M, which is up almost 18% from the previous year. Housing prices peaked in February at $1.4M and have been on a decline since then, even though home values are rising.
At the same time, prices for pre-sale and new construction have increased in 2021 in an unstable acceleration. Prices of new homes have plateaued with uncertainty as to whether they’ll drop or begin to rise again, though early statistics show that the cost is on the increase.
Unfortunately, the Canada Mortgage and Housing Corporation (CMHC) has listed Hamilton-Burlington as high risk in their September 2021 Property Market Risk Assessment. Of their four benchmarks: overheating, price acceleration, overvaluation, and excess inventories, they have identified three out of four as being a moderate risk. Demand is outpacing supply, price growth is rising, and prices are overvalued.
How can you make this work in your favor? The identified need for rental units makes considering investment properties an interesting prospect, though the median sale price for townhouses and row houses rose almost 30% in the first quarter, which hits a new record for the median sale price, according to the Canadian Real Estate Association.
If you’re thinking of selling, and you’re currently living in a single-detached home, another record was set as the median sale price rose by 28.9%.
While RBC forecasts housing markets in larger centers like Vancouver and Toronto to see a drop-off in 2023, it’s yet uncertain what the impact will be on places like Burlington. Should the newly formed Task Force be successful in its initiatives, especially in creating a variety of housing opportunities for its residents, demand will certainly slow down, which will in turn impact numbers. As this task force is in its infancy and still accepting feedback from residents, it would be a safe bet to declare the Burlington real estate market as still hot, hot, hot.