First-time home purchasers in B.C. are increasingly worried they will miss out on buying a home they want due to financial constraints, according to a recent report.
The report and survey, which Environics Research and Roal LePage conducted, took a look at a number of key trends among Canadian first-time homebuyers, who bought a home within the last two years.
“Canadians continue to face challenges in entering the real estate market, be it high-interest rates, strict mortgage qualification standards, or difficulty saving enough money in a reasonable time period for a down payment,” said Phil Soper, Royal LePage’s president and CEO.
“That first transaction is the most difficult, and in today’s environment, first-time buyers are faced with large price tags, high carrying costs and the added challenge of qualifying for lending at higher rates due to the stress test.
B.C. first-time homebuyers ranked number one in the country for “most worried” in regards to missing out on the home they wanted due to not having enough for a down payment saved.
More than 40 per cent of first-time homebuyers said they leaned on their families to help them, with 19 per cent saying they still receive help with mortgage payments, which jumps up to 26 per cent for the Greater Vancouver area.
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“Today’s first-time homebuyer faces elevated property prices and rising interest rates, factors that are prolonging their inability to get a foot on the property ladder,” said Shawn Webster, a Royal LePage sales representative.
“There is a lot of anxiety about having enough money saved for a down payment. Young people are living with their parents longer and are making other concessions to build up their savings as much as possible.”
According to the survey, 72 per cent said they were worried their down payment would not be enough to get the home they wanted.
“Parents are far more financially involved in the home purchase process than they used to be; it is rare to meet a buyer who is able to get the necessary funds together on their own without outside help,” Webster said in a release.
“Often, we see adult children receiving gifts of upwards of $100,000 towards their home purchase,” said Webster.
“First-time buyers struggle to afford detached homes, so smaller strata units are more likely to be within their reach.
“Young people still prefer to own property in walkable communities that are close to amenities, though buyers who don’t have the option to work remotely must be more flexible about their location.”
Low inventory in B.C. continues to pose a challenge for first timers, as they are forced to compete with existing homeowners:
- 25 per cent said they had to pivot to a different, more affordable neighbourhood than originally planned
- 32 per said they had to purchase a smaller home than originally planned
- 9 per cent said they had to seek financial help from family and friends
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