Hamilton’s Basement Boom: 500% Surge in Basement Conversion Inquiries

How soaring mortgage rates and Hamilton’s impressive $1.10B property assessment growth are driving a 500% jump in legal basement conversion inquiries—sparking a home renovation revolution across the city.

March 11, 2025  |  Written by Marco Manazzone from Zzone Homes.

The Big Picture

Provincial Boom:

• MPAC reports indicate that Ontario’s property assessments surged by $42.7B in 2024.
• Hamilton contributed approximately $1.10B to this boom.

Why It Matters:

• Economic Growth: Rising assessments indicate increased investment, improved property values, and a more vibrant local market.
• Financial Pressure: As values soar, so do the costs for homeowners, pushing many to find creative ways to offset high mortgage payments.

Hamilton contributes $1.10B to Ontario’s $42.7B property boom, signaling strong local investment and rising property values.

Mortgage Squeeze and Its Local Impact

Canada’s Mortgage Reality:

• Most mortgages reset every 4-5 years, leading to sudden payment hikes.
• Carolyn Rogers from the Bank of Canada explains that about 60% of mortgages will be up for renewal in the next two years, with many borrowers experiencing higher monthly payments as they refinance at current market rates.
  
  While interest rates have recently eased, they are still well above past lows, making mortgage renewals more costly for many homeowners.
• The Result:
  • Many Hamilton residents are converting basements into legal rental units to offset rising costs.

Understanding Canada’s mortgage renewal cycle: How most homeowners face increased payments every 4-5 years, impacting affordability.

A Surge in Demand for Secondary Suites

Local Trends:

• Zzone Homes‘ internal data shows a 500% increase in inquiries for basement conversions (basement apartments, in-law suites, and ADUs) compared to last year.
• Currently, 60% of weekly inquiries are focused on basement conversion projects, a significant jump from 20% in previous years.

What Homeowners Are Exploring:

• Legal Basement Apartments: Generate steady rental income.
• In-Law Suites: Offer space for extended families.
• Multi-Generational Homes: Share expenses while keeping family together.

Zzone Homes’ internal data shows weekly inquiries for basement conversions jumped from 20% in previous years to 60% in 2025, reflecting homeowners’ financial strategies.

Success Stories & Expert Insights

Expert Perspective:

Zzone Homes’ CEO and local home renovations expert, Marco Manazzone, explains, “Rising mortgage rates have forced a reevaluation of what our homes can do for us. Converting basements into legal rental units isn’t just about extra income, it’s about making our properties work harder in today’s market.”

Client Success Story:

One homeowner invested $145,000 in a basement conversion, leading to an 8% increase in property value and generating rental income between $1,950 – $2,250 per month. This additional revenue now covers a significant portion of their monthly mortgage payments.

Before-and-After pictures of a legal basement apartment project.

National Context, Local Impact

Broader Trends:

• Data from the Canadian Real Estate Association shows that monthly interest payments in 2025 on a five-year fixed mortgage remain almost 40% higher than in January 2020-2021, despite recent declines from last year’s peaks.
• High mortgage costs continue to drive innovative solutions nationwide.
• Hamilton’s Response:
  • Local ingenuity is turning this crisis into opportunity, as evidenced by the surge in secondary suite conversions.

Canada’s 5-Year Fixed Mortgage Interest Rates (2020-2025): Rising Rates and Hamilton’s Basement Conversion Boom. Sources: https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/, and Zzone Homes internal data.

Conclusion

Hamilton’s dynamic response, by using basement conversions to counter rising mortgage costs, illustrates a broader shift in the housing market. With Hamilton’s robust $1.10B contribution to Ontario’s property boom, local homeowners are turning challenges into opportunities.

At Zzone Homes, we take pride in being at the forefront of this renovation revolution, helping homeowners maximize their property value, generate additional income, and create multi-functional living spaces that meet the needs of today’s market.

Methodology

Data Sources:

• MPAC Report: “Ontario sees another record increase in the value of property inventory with over $42.7B in new assessment”
  • This report provided detailed data on Ontario’s property assessments, including Hamilton’s contribution of approximately $1.10B, which underscores the region’s robust growth.
• Bank of Canada: “Canada’s mortgage market—A question of balance”
  • This source offered insights into Canada’s unique mortgage structure, particularly how variable or short-term fixed-rate mortgages are impacting homeowners through sudden renewal payment hikes.
• Reuters – Housing Affordability Crisis: “Canada’s housing affordability crisis may persist for years despite rate cuts”
  • Reuters’ analysis highlights the ongoing challenges in housing affordability, emphasizing how high mortgage costs continue to drive innovative solutions like secondary suite conversions.
• Internal Data Provided by Zzone Homes:
  • Our proprietary data reveals a 500% increase in inquiries for legal basement suites, in-law suites, and accessory dwelling units – currently representing 60% of our weekly inquiries compared to 20% in previous years.

Analysis Process:

• We compiled and cross-referenced data from MPAC with national mortgage reports to highlight the economic pressures on homeowners.
• Our internal metrics were analyzed to identify trends in renovation inquiries and consumer behavior.
• The combined insights were then synthesized into a cohesive narrative that connects rising property assessments and mortgage pressures with the surge in basement conversions in Hamilton.

This methodology ensures that our article is grounded in authoritative, multi-sourced data and that our conclusions reflect both macroeconomic trends and local consumer behavior.