CREDIT: Associated Press Files Young people in the Lower Mainland are showing more readiness to take the home-ownership plunge, a survey suggests.

If you want to find out about the needs and expectations of first-time home buyers, just ask them.

In fact, we at the Greater Vancouver Home Builders’ Association have been doing just that for the past 10 years.

We recently examined this year’s responses, from 240 young people, all of whom were actively searching for their first homes.

Sure, some responses are predictable: Younger buyers believe today, as they believed in 1993, that the major obstacles preventing them from buying their first homes are high prices and having to scrape up enough cash for down payments.

This year, however, the positives outpace the negatives.

There appears to be a renewed optimism and confidence among young people eager to purchase a home. And forget about waiting for Mr. Right, more single women are buying homes alone.

If this year’s survey results are an indication, most potential first-time home buyers in the Lower Mainland are:

– 25 to 34 years old.

– Currently renting, and not living with their parents.

– Planning to purchase a home with a spouse or partner within a year.

– Prefer a two- or three-bedroom townhouse or low-rise condo sized between 1,000 and 1,800 square feet.

Additionally:

– Two-thirds of them expect to pay more than $200,000.

– Half indicated they would use up to $20,000 in RRSP funds for their down payments.

Some other findings follow. I added my own observations after each survey statistic.

– 64 per cent of respondents cited high housing costs as the major obstacle preventing them from buying their first home. Twenty-nine per cent said an insufficient down payment was the major obstacle.

As expected, these two impediments placed one-two. And first-time buyers likely aren’t doing any high-fives at the news that Vancouver just reached an average home price of $300,000. That said, many builders are offering well-designed homes priced far less than that average.

– 67 per cent of respondents currently rent accommodation and 17 per cent reside with parents.

With low mortgage rates, many renters realize that trading rent cheques for mortgage payments makes sense. Others will vacate the comfy family nest. For both groups, this is a happy milestone.

– 68 per cent will be purchasing their first home with a spouse or partner. Twenty-six per cent said they will be buying their first home alone.

Married or common-law, or simply two friends — mingles — pooling their resources as they would with a rental apartment, couples are taking the homeownership plunge. One-quarter of the respondents are going it alone, and half of this solo group are women.

– 37 per cent said they plan to buy within six months, while 46 per cent indicated they would buy within one year. Ten per cent said they plan to buy within the next two to three years.

A stated fear that both housing prices and interest rates might rise likely contributes to a greater sense of urgency among survey respondents than was expressed by respondents in previous years.

– Fourteen per cent said they plan to purchase a detached home; 27 per cent, a townhome; 29 per cent, a lowrise apartment; and 13 per cent a highrise apartment. The rest were undecided.

No surprise here. These are savvy folks who know what housing type they can afford. Many respondents realize that a single-family home will, in all likelihood, be their second or third step, not the first one. Ground-oriented housing, however, seems to be the clear preference.

– Four per cent said their maximum purchase price would be less than $125,000; seven per cent said $125,000-$149,999; 13 per cent, $150,000-$174,999; 14 per cent, $175,000-$199,999; 25 per cent, $200,000-$249,999; and 36 per cent, more than $250,000.

A sign of the times. This is the first survey in 10 years where one-third of the respondents said their maximum price would be more than $250,000. Two-thirds say their max is over $200,000.

– Four per cent said they have less than five per cent for a down payment; 29 per cent said 5 per cent; 47 per cent, more than five per cent but less than 25 per cent; and 19 per cent, more than 25 per cent.

This refutes the assumption that most first-time buyers opt for five-per-cent down. Nearly 30 per cent are indeed choosing that percentage, but two-thirds say they have more to plunk down, thanks perhaps to generous parents. The five to 25 per cent option on the survey is too broad a spread. In next year’s survey we will add threshold options at 10, 15 and 20 per cent.

– 51 per cent said they would use RRSPs as part of their down payment; 30 per cent indicated they will use $20,000 in RRSP funds for their down payment.

Go to the head of the class, kids. There are great benefits to using RRSPs. The maximum is $20,000 per person, and it can be repaid, either as a lump sum or installments over 15 years.

– 10 per cent said they will likely buy a home smaller than 800 sq. ft., 14 per cent said 800-999 sq. ft., 13 per cent said 1,000-1,199 sq. ft., 17 per cent said 1,200-1,499 sq. ft., 21 per cent said 1,500-1,799 sq. ft., 12 per cent said 1,800-1,999 sq. ft. and nine per cent said more than 2,000 sq. ft.

The responses here were all over the map. Expectations, however, are reasonable as respondents know they don’t want or can’t use more than 2,000 sq. ft. One young, active couple told me they couldn’t see themselves cleaning, heating, furnishing and maintaining a 2,000+ sq. ft. home.

– 13 per cent said they need only one bedroom, 40 per cent said two bedrooms, 39 per cent said three bedrooms and 5 per cent said they want a four-bedroom home.

The last few years the responses to this question have been almost identical. Have you noticed that many third bedrooms in display homes are furnished and equipped to represent a home office?

– There was no clear preference for location, although Vancouver, Surrey, Burnaby and Langley were mentioned most.

There are many choices of house types and prices throughout the Lower Mainland. You choose.

– 93 per cent said it is important that their new home be protected by home warranty insurance.

The seven per cent of respondents who said it was not important should give their heads a shake. New home buyers in B.C. are protected by the most comprehensive warranty coverage in North America. It is interesting to note, however, that a lack of consumer confidence wasn’t even on the respondents’ radar screens. They all looked forward to owning their own homes.

– 12 per cent of survey respondents were under 25, 45 per cent were between the ages of 25-34, 24 per cent were 35-44, nine per cent were 45-54 and two per cent were over 55.

Oh, to be young again. No revelation here with the weight in the 25-34 age group. But, some of the respondents were single-again women in their 50s. When they bought their first homes, the husbands handled the details. Now they are buying their first homes alone. A re-start if you will.

– Features most desirable to respondents include energy-efficient homes, healthy indoor air, secondary suite and flex/adaptable design.

Many of the respondents belong to the blue-box generation. They are concerned with energy conservation, and healthy home design and construction. Also, they view secondary suites as potential mortgage helpers. The issue of secondary suites is hotly debated in many municipalities.

– 92 per cent of respondents said they consider the Greater Vancouver Home Builders’ Association a credible source of housing information, two per cent said they did not, six per cent did not answer the question.

Great answer, except from the two per cent who obviously were in a nasty mood. Can’t please them all. Leaving the best to last, there’s a wealth of housing information on our website — www.gvhba.org.

Peter Simpson is chief executive officer of the home builders’ association.
His email: [email protected]

© The Vancouver Sun 2004