Changing Factors Could Affect The Hamilton Real Estate Market
The Hamilton real estate market, along with many other parts of the country, has recently been experiencing an economic recovery and strong housing sales over the last few months. This has largely been due to how well the Canadian economy in general has been able to weather the recession but also historically low interest rates have kept at least the monthly payments for mortgages relatively low and affordable for many home buyers. This is a trickle-down effect for every other business that relies on healthy real estate values that include contractors, lawyers and of course the banking institutions. This surge in the real estate market could come to an end as the main two driving factors see a change.
Starting in July the new HST tax comes into effect and while it does not apply directly to resale homes new construction properties will be subject to the new tax. As well all costs associated with purchasing a home will also be subject to the new text. This includes real estate agent commissions, lawyers fees, all inspections and anything else that is associated with buying a home. On the heels of the new tax interest rates will also be on the rise as the Bank of Canada has already increased its lending rate. This could make it more difficult for first-time buyers to enter the market and may cause other buyers to think twice about selling their home in the hopes of moving up to something bigger. These two factors combined could see prices of the Hamilton real estate sector to decline or hopefully just stabilize for the rest of the year.