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Katherine Pereira and her husband hope to one day be able to afford a home – but that dream has been pushed further and further down the road.
The couple has lived in Waterdown for four years and hoped to stay in the community but the soaring housing costs over the past few years and the recent increase in interest rates has rendered that dream impossible.
“It’s really disheartening,” said Pereira, who rents a townhome in the community. “Even with housing prices dropping, it’s still too expensive.”
She said when the couple started renting the home a year ago, they hoped to only stay there for a year before buying. They had considered moving out of province, but as all their family is in the area, they have decided against it.
“House prices are going down… houses are sitting longer, which is good – but at the end of the day interest rates are high,” she said. Pereira noted inflation has also compounded the situation because they are paying more for everything, which makes saving for a down payment difficult.
Pereira said home ownership is still the goal at some point – but they are “kicking the can further down the road.”
Situations such as Pereira’s are something longtime Flamborough realtor Drew Woolcott has seen grow even as real estate prices have dropped in recent months. He said in general, buyers he is working with are feeling anxious about the situation, as higher interest rates have made purchasing a home more difficult – even as prices drop.
According to a recent report by the Realtors Association of Hamilton-Burlington, prices across the city as a whole dropped from August 2021 to August 2022 – to a city-wide average of $ 792,700 – but that isn’t the case in Waterdown and Flamborough.
In Waterdown, the amount of sales decreased to 37 in Aug. 2022 from 49 in 2021 and the average price increased slightly to $ 970,757 from $ 955,378. Meanwhile, in Flamborough the number of sales decreased from 21 in 2021 to 17 in 2022, but the average price increased from $ 1,386,698 to $ 1,564,824.
In terms of affordability, Woolcott said interest rates are the biggest factor in the current market. He said the increases represent a “very significant” jump in mortgage payments for many people.
Woolcott said the affordability issues have meant many prospective buyers have been priced out of the Waterdown and Flamborough markets – and that situation has gotten worse with interest rate increases.
“The interest rate rise has more than offset the drop in prices for most buyers,” he said.
So what can be done about the affordability crisis?
Tom Cooper, the director of the Hamilton Roundtable for Poverty Reduction, said housing affordability should be the No. 1 issue in the Oct. 24 municipal election.
“Rents are continuing to skyrocket and as we’ve seen interest rate hikes, leading to increasing mortgage rates, that’s only going to increase the pressure on tenants,” he said. “Fewer people can afford homes, so more people are staying in rental accommodations. They’re not able to necessarily move into home ownership. “
Citing a June report from Canadian insurance provider PolicyAdvisor that ranked Hamilton as the third-most-expensive city in Canada when it comes to cost of living versus income, Cooper said Hamilton needs to adopt innovative thinking to curb the affordability crisis.
Cooper said that while the municipal government doesn’t have the same abilities as the federal or provincial governments, they can adopt inclusionary zoning, which would require a certain percentage of new developments be affordable housing. He said that should be a particular focus along the LRT route, but also elsewhere in the city.
In addition, he suggested the city could consider a municipal rent bank, to help tenants who fall into an emergency situation, as it costs far more to deal with homelessness once it becomes a reality, rather than dealing with root causes. But as homelessness is at one of the highest levels he’s seen in the city, Cooper said Hamilton should explore a community of tiny homes or tiny cabins for people who are living on the street – something that has been tried in other jurisdictions.
However, he said municipal support is required to make that a reality.
“We’re hoping the new municipal council will get behind this idea as an experiment to start with just to see how it rolls out and if it can support people and help stabilize lives and get them into more permanent forms of housing once it becomes available . “
STORY BEHIND THE STORY: As the municipal election looms, the Flamborough Review wanted to look into the issue of housing affordability and what can be done at the city level.
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