The majority of first-time homebuyers in B.C. are worried about the size of their down payments, according to a new survey.
In Metro Vancouver, 71 per cent of first-time homebuyers are concerned their down payment will not be enough to get the home they want prior to purchase. Respondents across B.C. reported a similar level of concern at 72 per cent, according to the June 22 survey from Royal LePage.
Those fears have been ramping up the past few years across Canada.
Respondents concerned about an insufficient down payment increased to 67 per cent in 2023, up from 62 per cent in 2021 and 57 per cent in 2019.
“Today’s first-time homebuyer faces elevated property prices and rising interest rates – factors that are prolonging their inability to get a foot on the property ladder,” Shawn Webster, a sales representative for Royal LePage Little Oak Realty, said in the survey report.
“There is a lot of anxiety about having enough money saved for a down payment. Young people are living with their parents longer and are making other concessions to build up their savings as much as possible.”
First-time homebuyers across the province are navigating a competitive market with increasing prices. This is further compounded by the low housing inventory that’s pitting first-time homebuyers against existing homeowners who have more negotiating power, according to Webster.
To get in the market, 41 per cent of first-time homebuyers in Metro Vancouver and B.C. said they received financial assistance in a lump-sum payment from family toward the purchase of a home.
“Parents are far more financially involved in the home purchase process than they used to be. It is rare to meet a buyer who is able to get the necessary funds together on their own without outside help. Often, we see adult children receiving gifts of upwards of $100,000 towards their home purchase,” Webster said in the report.
In Metro Vancouver, 26 per cent of buyers received financial help on monthly mortgage payments. Forty per cent of those who received help say that it was a gift.
Beyond receiving family aid, buyers are choosing to seek homes in more affordable neighbourhoods.
Twenty-five per cent of first-time buyers in B.C. purchased a home in a more affordable area than they had originally planned. This is similar to Metro Vancouver, where 28 per cent of first-time buyers made the same decision.
In addition, 32 per cent of B.C. buyers and 34 per cent of Metro Vancouver buyers bought a smaller home than originally planned.
“First-time buyers struggle to afford detached homes, so smaller strata units are more likely to be within their reach. Young people still prefer to own property in walkable communities that are close to amenities, though buyers who don’t have the option to work remotely must be more flexible about their location,” said Webster.
