British Columbia is running out of first-time buyers, despite falling prices. Government of British Columbia filings show first-time homebuyers made a small increase in June, compared to the month before. However, this increase wasn’t big enough to reach last year’s levels. The province continues the multi-year trend of declining first-time homebuyers.
B.C. First-Time Homebuyers Drop Over 15%
B.C. saw a mild bounce in first-time buyers last month, but the number in the province is still on the slide. There were 1,115 first-time buyer’s in June, up 38.3% from the month before. However, this number is still down 15.1% compared to the same month last year. A lot higher than the month before, but still not close to clearing last year’s number.
B.C. First-Time Homebuyers
The number of first-time homebuyers in B.C. per month.
Source: Government of B.C., Better Dwelling.
The decline is a small improvement from the month before, some of it may be delayed demand. Since the beginning of the pandemic, first-time buyers have been on the slide. It wasn’t until May when a massive 38.3% decline hit the market. The bump in June is likely some buyers delayed from the month before. However, this won’t be clear until a few months down the road.
First-Time Buyers Have Declined For Several Years
The pandemic did contribute to the decline, but this is a much more long-term trend. There were 5,517 first-time buyers year-to-date (YTD) in BC, down 7.85% compared to the same period last month. In 2019 though, the YTD sales during the same period were down 8.5% from a year before. Home prices in Greater Vancouver, the province’s largest market, peaked in 2018.
B.C. started the year with more first-time buyers, but that was quickly derailed by the pandemic. There was a small bounce last month, but it wasn’t even close to meeting last year’s levels. The first-time buyer drop isn’t due entirely to the pandemic, since this has been a multi-year trend.
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You mean first-time money launderers disappeared?
Money laundering mostly disappeared when it came on the radar of the federal government. Why launder in BC if you can launder in Ontario with zero resistance?
Household income of $80k = $475k mortgage @ 2%. A first-time buyer needs a downpayment of $300k to make that work in BC, or almost 4x gross household wages. Near impossible to buy unless you have rich parents.
The “average” or median household doesn’t need to buy in this market. Wealthier, six-figure first-time buyers could easily support this volume. There’s enough rich young people that can support this market for years at this price level.
So if first-time buyers are disappearing, the foreign buyer narrative is correct?
No, these are regular buyers that just have a little extra money and are upgrading. Everyone thinks they’ll sell their condo apartment or become a landlord a little later, and never have to work again.
I’m wondering what effect skyrocketing strata insurance rates are having on potential first time buyers who might be able to afford a $650k condo but can’t drop $1mil+ on a single family home. Who in their right mind is buy condos right now knowing that insurance is going to double, or more?
First-time home buyers are decreasing because it is so hard for most to get into this market. I hear from many people (in their 30’s) that even with a professional job they don’t qualify for a high enough mortgage with only 10-20% down even though their mortgage payment would be less than what they are currently paying in rent. I don’t believe the number is declining due to not enough out their wanting to buy, but because they simply can’t. I