Lower prices keep dream of home ownership alive
Sun
CREDIT: Jason Payne, The Province (A condominium building)
Owning your own house on your piece of land may be the dream, but first-time buyers who want to live in Greater Vancouver will likely find the home they can afford is a condominium or townhouse.
Despite the increasing cost of real estate in Vancouver and its suburbs, first-time buyers can still enter the housing market, according to a report released yesterday by RE/MAX real-estate company.
The report looked at 19 cities across Canada, including Kelowna, Vancouver and Victoria, and found that last year at least 50 per cent of homes in each city sold for less than the average home price in that market.
In Greater Vancouver, 60 per cent of homes sold for less than the average price of $375,000 and 28 per cent of sales were of homes priced at less than $250,000. But nearly all of those sales — 95 per cent — were condominiums or townhouses.
Rising prices in Victoria have also led first-time buyers to consider resale condos rather than detached houses, the report said.
The average price in Victoria and its suburbs was $328,503 last year — almost $45 more than the average price in 2003. In Kelowna, the average home price was $287,000 and 48 per cent of homes sold for less.
“Despite the fact that average price set new benchmarks across the country in 2004, affordable housing options were available in every city,” said Elton Ash, vice-president of the company’s Western Canadian division.
“With interest rates forecast to experience little or no upward fluctuation in 2005, that trend will undoubtedly continue throughout the year.”
Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said high land prices are making multi-unit housing a more affordable option.
“Townhouses seem to be what buyers want,” Simpson said. “There are a lot of these projects on the market, especially in the suburbs around Vancouver — it’s almost a return to the rowhouses you see in the east.”
He said most people want to live in a detached, single-family house, but a townhouse with a ground-level entry is often an acceptable compromise.
“The cost of land makes single-family homes out of reach for most first-time buyers,” Simpson said. “Townhouses are priced well below detached houses in the same market, and they are a better use of land.
“They seem to appeal to the first-timers and the last-time buyers.”
– Housing starts in the Lower Mainland dropped 17 per cent last month compared to January 2004, according to the Canada Mortgage and Housing Corporation’s report released yesterday.
Across B.C., starts were down 21.5 per cent last month compared to a year ago — matching the Prairies for the largest decrease in the country.
For detached homes, starts fell 25 per cent to 290 units in January compared with the same period last year, and multiples dropped 15 per cent to 1,051 units. “Snow and torrential rain hampered the efforts of many homebuilders in January,” said CMHC analyst Cameron Muir.
“The inclement weather meant it was unlikely that January housing starts would approach the 10-year high recorded in January 2004.” But CMHC is still predicting that housing starts will reach 20,000 units in 2005, a three-per-cent increase over last year, Muir said.
© The Vancouver Province 2005