Hamilton offers a great mix of affordability and city living, while remaining in close proximity to the city of Toronto. Originally know as a steel town, the city grown to encompass so much more and offers an enticing mix of top notch schools and universities alongside all of the benefits of living in the 9th largest city in Canada. Perfect for families and new comers looking to put down roots, Hamilton is one of the few areas within the GTA with affordable options.
Real Estate Trends
According to the latest report published by The REALTORS® Association of Hamilton-Burlington ("RAHB"), the average home price in Hamilton for 2020 was $629,961. That represents a 18% increase from 2019.
COVID-19’s impact on the real estate market throughout the GTA can clearly be felt across the suburbs, with significant amounts of families moving away from city center condos into detached homes.
The chart below illustrates the average home price trend in Hamilton since 2012 for all home type. The average home prices have gone up in a big way since 2012, with the average sale price going from $290K to $630K. This has translated to roughly 10% in growth annually since 2012.
Exhibit: Historical Average Home Price - Hamilton
Source: The REALTORS® Association of Hamilton-Burlington
Located at the southwestern tip of Lake Ontario, Hamilton crosses through all the major highways and is within 1 hour drive of downtown Toronto. While the city is connected to GO Transit, trips to and from Toronto will typically take 1-2 hours each way. Likewise, the city is within an hour drive to the Kitchener/Waterloo and London areas, making it the perfect hub for any professionals working in southwestern Ontario.
Hamilton has grown to have a vibrant mix of manufacturing, technology, and health clusters that have helped position the city as an attractive destination for investments and headquarters. Historically, known as the steel capital of Canada, the industry has deep roots in the community and is home to some of the largest steel manufacturers in North America. Likewise, the city's biotechnology cluster has grown alongside its network of universities and hospitals. Acting as one of the main ports for Southwestern Ontario, Hamilton remains a key component of Ontario's economy.
Hamilton is home to numerous higher education institutions, most prominently by McMaster University, Mohawk College, and Brock University's satellite campus. Elementary and secondary institutions fall under the Hamilton Wentworth District School Board (HWDSB) and is home to some great options for young family's looking to settle down in the city.
How Rent to Own Could be Beneficial
Rent to own a home in Hamilton can be a great steppingstone to achieve your homeownership dream, allowing you to benefit from rising home prices as a renter. Let's say you have your eyes set on a home worth $400,000 today but you aren’t ready for a mortgage due to the lack of down payment or a not-so-perfect credit score. Essentially, you have two options:
Option 1: Renting for now and wait until two years later to purchase the home
Using the 10% appreciation that Hamilton has had over the past eight years, that means the same home will likely cost you $484,000 at end of the year 2.
Scenario 2: Rent-to-own with Requity Homes
Right from the start of our rent-to-own program, you know what you're going to pay for the home ahead of time. Instead of charging you a future price based on the historical growth (+10%), Requity Homes assumes a more modest 5% price increase every year, allowing you as a renter to benefit from the financial upside. In this case, you will be buying back the home at $441,000 at the end of the year 2 (versus $484,000 in scenario 1). That is $43,000 savings.
In many ways, rent-to-own can be better for your in the long run than just straight up renting and saving in a rising housing market.
About Requity Homes
Requity Homes offers a new path to home ownership by helping you live in your dream home today while saving up your down payment one month at a time.
Our modernized rent-to-own program is designed to help aspiring home buyers who may not be ready for a traditional mortgage with a bank currently. Through our program, our goal is to help the tenant (future home buyer) get ready for a mortgage and eventually purchase the home.
If you would like to know more about how rent-to-own works, check the following articles: