Buyers willing to give up square footage for something in good shape
Jim Jamieson
Province
CREDIT: Jason Payne, The Province A typical first-time buyer, Eric Pan choose L’Hermitage based on its great location and the nearly nonexistent upkeep.
When Eric Pan signed on the dotted line to buy his first home a few months ago, the keys for him were location and upkeep.
The first had to be great and the second nearly nonexistent.
That’s why Pan, a commercial real-estate appraiser, chose to commit $285,000 to the purchase of a
689-square-foot, one-bedroom
condo at the L’Hermitage development at Robson and Richards in downtown Vancouver.
“I was looking for a new place, not something that needed work,” said Pan, 28, who’s scheduled to move into his new digs in early 2007.
“You buy here and it has really nice finishings, you don’t have to worry about that. And it’s close to work for me and steps away from Robson Street.
“I’d rather pay more on a square-foot basis in a smaller space to live in a central area than in the ‘burbs.”
Pan typifies first-time B.C. homebuyers who are entering the market in increasing numbers, thanks to low interest rates, low down payments and a strong provincial economy.
But these buyers are settling for a lot less house for the money than their counterparts got 10 years ago.
Buyers in some markets are paying twice as much as they would have for the same small home a decade ago, according to a survey released yesterday by Century 21 Canada.
“People today look around and say, ‘I want to enjoy my life, too,'” said Brian Lawby, president and CEO of Century 21 Canada.
“People live in a city and they want to enjoy it. They are willing to give up some square footage, but they want something that’s in good shape.”
But Lawby said economics are also a factor, as most first-timers simply can’t afford an older home because they can’t afford repairs or renovations.
The national survey showed that markets are toughest for first-time buyers in Canada‘s largest cities. Price-per-square-foot increases range from 61 per cent in Vancouver to 69 per cent in Montreal and 53 per cent in Toronto.
Perhaps the hottest first-time buyer market in Canada is Fort McMurray, Alta., where the booming oil-sands economy has pushed the price of a 1,200-square-foot townhouse to $285,000, or $237 per square foot.
That compares with 10 years ago when a slightly smaller townhouse cost $46,000, or $42 per square foot — an increase of 468 per cent over the decade.
Other key market trends spurring B.C. first-time buyers:
– The posted five-year mortgage interest rate is 5.7 per cent, compared with 9.16 per cent in 1995.
– The provincial housing market is hotter than 10 years ago. In 1995, there were reported sales of 58,082 units at an average price of $221,860. For the past year, unit sales were 96,385, at an average price of $289,107.
– The provincial average family income is about $61,700, compared with $59,440 in 1995.
COST INCREASES FACED BY THE FIRST-TIME HOMEBUYER
Downtown Vancouver Typical home Cost Increase
1995 625 sq/ft condo (West End) $150,000/$240 sq/ft
2005 650 sq/ft condo (Yaletown) $250,000/$384 sq/ft 61 per cent
Abbotsford Typical home Cost Increase
1995 1,100 sq/ft detached $160,000/$145 sq/ft
2005 1,000 sq/ft detached $250,000/$250 sq/ft 72 per cent
Kelowna Typical home Cost Increase
1995 2,000 sq/ft detached $150,000/$75 sq/ft
2005 1,400 sq/ft detached $220,000/$157 sq/ft 110 per cent
Vernon Typical home Cost Increase
1995 1,100 sq/ft townhouse $65,000/$59 sq/ft
2005 1,200 sq/ft detached $225,000/$188 sq/ft 217 per cent
© The Vancouver Province 2005
