Market analysts say there is no reason to believe the housing market is a bubble destined to burst, despite ever-increasing housing prices that seem to mirror the skyrocketing growth in the 1980s.

The value of Hamilton homes has risen by an average of 62 per cent in the last decade while detached homes have climbed 72 per cent.

But while the bottom dropped out of the housing market in the 1980s when prices reached similar levels, analysts with the Canadian Mortgage and Housing Corporation (CMHC) say they expect the market to level off rather than crash.

The analysts - who presented their outlook for the Hamilton housing market the other day - say housing prices are expected to continue rising by 7 or 8 per cent annually, pushing the average resale home for the Hamilton Census Metropolitan Area (which includes Grimsby and Burlington) up to $244,000 next year.

Mortgage rates are expected to increase slightly but remain low enough to off set the price increases and slower income growth.

"The number one winners are sellers in the current market -- you're making huge profits on you home right now," said Dana Senagama, Hamilton market analyst with CMHC.

"But, from a homebuyer's perspective, the low mortgage rates are a huge incentive. So, in the end, both homeowners and homebuyers are gainers."

She said growth is slowing naturally because of a drop in construction and a slowing of migration from places like Toronto, where the market is starting to balance out more in favour of buyers.

But unlike the 1980s when soaring mortgage rates crippled the market and speculators driving up prices, mortgage rates are the lowest they've been since the 1950s and supply is outstripping demand.

Low mortgage rates are the key factor that will sustain the market, she said.

"Prices are at the same level they were when the market crashed in the 80s," Senagama said. "But there is no price bubble in Hamilton. We will not see the market crash. Overall, we're going to see another strong year."

Bob Dugan, CMHC's chief economist, said globally Canada is in a good position as well. While housing prices are rising faster than income in countries like the United Kingdom and Australia, he said the Canadian pay cheque is keeping pace with rising costs.

"The situation is quite sustainable," Dugan said.

Other economists agree. Adrienne Warren, senior economist with Scotia bank in Toronto, said construction is down slightly and the resale market is levelling off.

"Things are finally plateauing, but are still at a high level," she said. "That's essentially a good sign."

The news comes as a relief to local realtors who were concerned about another market crash.

"I'm delighted to hear (Senagama) emphatically say there is not going to be a price bubble," said Judy Marsales, Liberal Hamilton West MPP and owner of the city's largest dependent real estate company.

"I would be exceptionally happy if they are right. It indicates to me that Hamilton in thriving, growing and has turned that corner."

She said CMHC's projections have been "spot-on" in the past. But she questioned their prediction that the number of houses on the market will slow up.

Marsales said she is seeing a lot of baby boomers looking to downsize in favour of condominiums and bungalows. She expects they will put their houses on the market, keeping up with demand.

"They're at a stage in life where they're contemplating other lifestyles and I see more housing coming to the market because of that."

Both realtors and analysts say the forecast suggests now is a good time to consider buying a home, simply because it's a safe investment. Rebecca Ryder, president of the Realtors Association of Hamilton-Burlington, said current homeowners are reaping the benefits of current market conditions.

"Its good news for homeowners," said Ryder, who is also a Burlington real estate agent with Royal Le Page. "Their investment is accruing."

For her part, Senagama said the housing market looks safer than the stock market right now.

"It's one of the most solid investments you can make," she said. "Sure, you can invest your money in the stock market but you know how volatile that is. Real estate is a much better investment, especially in Hamilton."