With Hamilton real estate less affordable than New York City, first-time homebuyers are losing hope
You will move to a wonderful new home within the year." Lucky numbers: 8, 9, 10, 24, 43, 48.
Melissa Perna had pinned some of her hope for becoming a homeowner in that message, unfurled from a fortune cookie this past winter.
Born and raised in Hamilton, Perna and her longtime partner, Steve Przychocki, continue to live at home with their families in hopes of saving up for a down payment on a house in the city. She calls herself lucky to have stayed employed during the pandemic, and even received a promotion at her retail management position that she hoped would help the couple outpace rising home prices with their increased savings.
We always have this fantasy, going into these houses and looking at ... this is where we're going to have a party, and this is where we're going to put our Christmas tree, and really romanticizing it," the 31-year-old said.
And then we kind of catch each other. We just look at each other like, Don't get too excited, because it's not going to happen.'"
For those first-time and repeat home buyers in Hamilton feeling dispirited, new research showing that housing is less affordable here compared to notoriously expensive Los Angeles and New York City provides little reassurance.
The study by Oxford Economics, a global financial forecasting company based in the United Kingdom, found Hamilton ranked third among least affordable North American metro areas, after Vancouver and Toronto, in the first quarter of 2021.
Hamilton outranked San Jose, Los Angeles, Ottawa, Seattle, and a tie for eighth place between Montreal and New York City. On the opposite end, Chicago ranked the most affordable of 25 areas analyzed, with Quebec City, Edmonton, Winnipeg and Calgary among Canadian cities making that list.
Oxford's housing affordability index for the Canadian cities accounts for a 20 per cent down payment, 25-year amortization period for mortgages, and 39 per cent gross debt service ratio - a borrower's monthly expenses related to housing, including utilities and property taxes - that most lenders require to qualify loans.
The study found that homes in Canada were 34 per cent more expensive than what middle-income households could afford.
Joe Deschenes Smith, who co-heads Trillium Housing Non-Profit Corporation, said his organization has been pushing to create 130 affordable townhouse units at sites in Winona and Stoney Creek, in partnership with Hamilton-based builder New Horizon Development Group. They are still awaiting permits and running into roadblocks on the project, compared to an easier process for another project in Toronto.
It's not like Toronto is the speediest place to get approvals, but we were able to do it here faster than in Hamilton; faster to the point where the units are built, and families have been living there for a year," he said.
Back on the house-hunt - with exorbitant bidding wars, risky decisions to forego inspections prior to an offer, and intimidation tactics by other prospective buyers when crossing paths at home showings - Melissa Perna feels her budget of $400,000 for a home is becoming more of a pipe dream. The feeling is trickling down to Perna and her partner's younger siblings who also hope to buy homes in Hamilton one day.
They see us and they don't even have the rosiness, the naiveness that we had at the beginning," she said.
Vjosa Isai is a reporter at The Spectator covering Hamilton-based business. Reach her via email: visai@thespec.com.