According to a recent RBC Economics Research study, Vancouver remains the least affordable city in Canada to buy a home – something that isn’t stopping first-timers prepared to lower their expectations, says one broker.
According to a recent RBC Economics Research study, Vancouver remains the least affordable city in Canada to buy a home – something that isn’t stopping first-timers prepared to lower their expectations, says one broker.
“It depends on what the first-time home buyers want to buy,” says Gina Best, broker/owner of Mortgage Alliance West. “If they are looking at a house, they have had their hands tied by the government and have to look at under a million.”
According to the RBC survey, Vancouver remains the least affordable city to buy a house in Canada while home ownership in Toronto is becoming more difficult.
“The Canadian housing market cooled significantly in the past year,” Craig Wright, chief economist at Royal Bank of Canada, said in a statement. “There is mounting evidence that activity is no longer weakening.”
Not true, says Best, who continues to see market slowdown.
“I completely disagree with this,” she says. “Just before the rules came down, I did a first-time home buyer who bought a house for over a million dollars with 5 per cent down and their debt service was about 38 per cent.”
Times have changed, but so have the expectations of some first-time buyers.
“Those home buyers here are not looking for the single family home right away,” says Best. “They understand that they are starting with the first step; then they move up the ladder.”
According to the report, the costs of owning a detached bungalow in Vancouver take up 82.3 per cent of a typical household’s income, up 0.1 percentage points from the previous quarter. In Toronto, that figure is 53.8 per cent, up 0.8 points, according to a housing affordability report for the first quarter produced by Canada’s largest lender.
But the biggest contributing factor to a sluggish market is the media, says Best.
“The biggest problem we have is the media and the perception that the general population gets about what is going on,” she says. “All these doom-and-gloom stories about the housing bubble bursting are creating consumer uncertainty.”
