For most of her life, 56-year-old Royal City resident Jackie Olds thought owning a home was nothing more than a pipe dream.
The market in the Lower Mainland was spinning out of control. There was no way she could ever afford to own, she couldn’t pay for those tricky, hidden costs. Or, so she thought.
“During my last experience trying to rent a place it was just a nightmare,” she said.
“Everything was overpriced and filthy. I went to this one apartment and lifted up the bread board and it was covered in bugs. I left in tears.”
Once the tears dried up, Olds decided to sit down and take a long look at her budget and see if she could manage the daunting jump into home ownership.
“It’s so scary, you just never feel like you know you can do it,” laughed Olds, now the owner of a condo in New Westminster’s Brow of the Hill neighbourhood.
“But, if you do your homework and you don’t rush in, it’s amazing.”
While Vancouver has become a place where real estate watching has become a sport of sorts—seemingly never-ending fodder for dinner party and water cooler chatter—those hoping to break into the market can feel overwhelmed at times.
According to the Real Estate Board of Greater Vancouver, the average detached home on the west side of Vancouver currently sells for $1.7 million. On the east side of the city, a detached home goes for around $746,000; in Burnaby, it’s $791,000.
But according to realtor Adam Goss, there are still attractive options for the first-time home buyer who doesn’t make $200,000 a year. The key is to equip themselves with a few tools before making that uncertain leap.
Goss said first things first: understand your finances.
Know where you spend your money and then decide what expenses you’re willing to part with to own a home.
For most, owning a home is a sort of forced savings plan, Goss said, and it’s going to affect your lifestyle.
“I recommend seeking a mortgage pre-approval and working off the figures provided to determine where buyers feel financially comfortable and what will be manageable.”
Find a neighbourhood
From there, the question arises as to which neighbourhood to live in.
Each presents its unique set of real estate hallmarks—from the type of housing available, to the cost, to the amenities you’ll find there.
For example, New West’s Sapperton neighbourhood has a number of 30-year-old condos. These buildings are generally wood-frame with shared laundry areas. These aspects tend to lower the price of a condo, with one-bedroom suites typically in the $165,000 to $185,000 range. For a two-bedroom suite, buyers will be looking in the $200,000 range.
Similarly, New West’s Brow of the Hill—below Sixth Avenue and west of Sixth Street––offers little in the way of new product. The bulk of buyers interested in this area will be looking at 20-year-old wood-frame buildings with one-bedroom units going as low as $150,000.
“The great thing for new residents in New West is the door to this community is wide open,” said Goss.
“Although we do hold on to our history tightly, and people are attracted to that, there is also more of willingness for change and a move forward these days. There are some exciting projects on the go.”
Next door in Burnaby, new construction abounds.
Just over two decades ago, the area around the Edmonds SkyTrain Station—now known as City in the Park—was dominated by forest and ravine, so the buildings there tend to be newer, concrete structures.
In-suite laundry, gyms, saunas and unobstructed views of the mountains are all available, and will affect the value of a unit. Recently sold two-bedroom units in the area have gone for around $280,000, but some have gone for as high as $349,000.
Over in Burnaby’s Metrotown neighbourhood, the city’s busiest area, the first-time buyer will find much of the same.
Recently sold condos have gone for as low as $308,000 for a two bedroom, and the $325,000 range is the average. Where Metrotown separates itself from other popular areas with first-time buyers is its proximity to the mall and the commercial centre of Burnaby. Location within that corridor, however, raises the value of a property, according to realtor Doris Gee.
“People still, of course, work in Downtown Vancouver so living around the SkyTrain in Burnaby just makes sense,” said Gee, who’s been specializing in Burnaby properties since 1989.
“This convenience of Burnaby has always been attractive for this market. And the option to save on a vehicle is important.”
Watch hidden costs
Demographically, the average first-time home buyer in B.C. is between the ages of 25 and 32 years old.
According to Angela Calla, a mortgage broker with Dominion Lending Systems and the host of CKNW’s Mortgage Show, 70 per cent of the province’s real estate purchases last year were first-time buyers.
“The average income we were seeing last year was $45,000, either combined or from one person,” said Calla.
“And a five per cent down payment was the average from that same demographic.”
Calla advises the rookie buyer to be aware of a few of the hidden expenses, such as closing and moving costs.
On a $250,000 home, Calla says, these expenses, coupled with the five per cent down payment, can run as high as $14,000.
And while the financial hoop jumping of home ownership will remain a painstaking inevitability for most, Goss believes the final decision to become a homeowner is always a personal one no matter what the numbers may say.
“You will always end up having the choice on where you will live,” he said. “You’re not being told where to look anymore. Realtors are here to educate you in every step of the process and show you the factors that can affect your purchase. But you will decipher what it is you want and whether you can do it.”