If you live in Vancouver, British Columbia or its surrounding cities, you're probably well familiar with the fact that housing prices are high. In fact, according to CTV News and Demographia, Vancouver is actually the second most expensive place to live in the world (behind Hong Kong).
We see it on the news all the time: how unaffordable and unlivable this city is. The media often makes it seem like first-time homebuyers will never be able to purchase a home. However, according to the Canada Mortgage and Housing Corporation (CMHC), in 2019 vacant property rent prices in Vancouver were almost $1,900 on average. In Vancouver, vacancy rates are astonishingly low at 1.1% in 2019, meaning that it is getting increasingly more challenging to find a place to rent.
Like all things, the rental market is based on supply and demand. As the demand for properties increases with less homes on the market, people have to pay more to secure the limited number of properties available.
With the dawn of the COVID-19 pandemic and concurrent economic downturn, many individuals are becoming weary of when it's a good time to invest. We get the question a lot these days: should I purchase now, or should I wait for the market to drop?
Problem is, people have been asking the same question for decades in Vancouver.
Here's what we do know: interest rates are at an all-time low. Due to the onset of the Coronavirus, the Bank of Canada lowered the interest rate to 0.25%. This has huge implications for first-time homebuyers, because it means that mortgages are cheaper than ever before.
On September 2, 2019, the Government of Canada announced a new benefit for first-time homebuyers. Essentially, this new incentive is a shared equity loan with the Government of Canada that gives you 5 to 10% of the equity of your home. This lowers mortgage carrying costs, and reduces the financial burden of having a huge mortgage.
Under the new incentive, you are granted a 5% loan for resale (existing) homes and mobile homes, and 10% for new developments.
Although there are rules and restrictions about the First-Time Home Buyer Incentive, most individuals and couples that have not purchased a home yet should be able to apply and receive funding.
For more information, we recommend checking out the official Government of Canada minisite and our other blog posts specifically on this topic.
Also, here's a video from the CMHC as well. It does a great job of explaining things in simple terms:
Before we make any recommendations, it's important to understand that most individuals will be able to afford a new home within the area with the right amount of planning and saving. For more information about how to save for your first property, check out our resources here.
In the event that you already have a nest egg of savings to put towards your first home, it's time to consider what type of property you will aim for. Although there are multiple types, we will consider two in this article: single family residential and strata residential properties.
As we all know, Vancouver is increasingly developing condominiums and apartments. So for first-time home buyers, this is a fantastic option to get into the market. Here are the top 5 most affordable communities to look at when looking to purchase a residential strata property in 2020, sorted by lowest average price to highest average price (Source: BC Housing Assessment):
If you look on our recent listings page, you'll notice that we have some great deals on properties in Langley, including some amazing off-market properties that are perfect for new families. Growth within Langley is at a high point.
When it comes to commutes, Coquitlam is a great option. Reason being, residents won't have to cross any bridges to get to work in the city, and the distance in general is reduced. In addition, the Skytrain Evergreen Extension allows transit commuters to get to work affordably and efficiently, bypassing traffic altogether.
For reference, average strata residential home prices in Vancouver are $686,000, still a great option for individuals that can take advantage of the First-Time Home Buyer Incentive.
If you are looking at purchasing a detached home, we also have our top 5 picks for communities within Metro Vancouver. Once again, the following list for 2020 is sorted by lowest average price to highest average price for a detached home (Source: BC Housing Assessment):
For those that are looking for reduced time to travel to work, Port Coquitlam and Delta are two great options. South Delta is seeing an incredible amount of recent growth, and with the announcement of a new Massey Tunnel Replacement, the issue of traffic will improve over years to come.
It is important to note that these prices are average prices. Deals can be found in all of these communities.
That's why it's super important to build a relationship with a Real Estate Advisor that truly understands the market (and isn't just out to gun for the sale!).
Myself (Amy) and Ally have done over $350m in Real Estate sales within the last 5 years in Metro Vancouver. Our mission is to educate and help individuals like yourself to be able to move into an incredible new first-time home.
We would love to get in touch with you, and learn more about your goals!
If you're starting to think about purchasing your first home, please feel free to get in touch with us. Send us an email at firstname.lastname@example.org or email@example.com, or visit our Contact Us page to schedule an introductory call.