The modest plans of two recent B.C. lottery winners highlight the challenge would-be homeowners face in the current real estate market.
The men, who each recently won $500,000, don’t live in the same area of B.C., are not the same age, and did not live in the same circumstances.
A young man from Coquitlam who won his prize in a BC/49 draw said he woke his mother up to share the good news.
He told the B.C. Lottery Corporation that the win will be life-changing for him, enabling him to buy a small condo and move out of his family home.
More than 900 kilometres away, in the small northern B.C. village of Fraser Lake, another man has a similar plan. He won his half-a-million in a Lotto Max draw this fall, and said the money will help him achieve a goal he’s had for a long time.
The winner told BCLC he’s been a renter for years, and wanted to get into the housing market, but it took the lotto win to enable him to buy a home.
These winners got lucky, of course.
Others have to lean on their parents, if they’re fortunate enough to have family members who can help out. A recent study suggested parents are coughing up an average of $180,000 to help their adult children enter the real estate market in Vancouver – the country’s most expensive housing market.
The report from CIBC highlighted a widening wealth gap in the country, finding that nearly one-third of first-time buyers need money from Mom and Dad to be able to put enough money down.
Last month, a realtor told CTV News Vancouver it’s common now for buyers to need help, and that it’s not just those in their 20s and 30s.
There are a variety of factors at play, one being that it’s so expensive to rent.
“It’s really unusual for somebody to have saved $100,000 or $200,000 by the time that they’re in their 30s just by working and saving,” Vancouver realtor Kate MacPhail, with Stilhavn Real Estate Services, said in October. “Most of my clients are already paying $2,500 a month or more in rent. Some of them who have kids are paying $4,000 a month for a three-bedroom, so being able to save on top of that is almost impossible for most people.”
And the challenges of saving enough aren’t helped by continuous price increases, making even starter homes unattainable to many.
Prices have been high in B.C. for years, and right now, the market is at a historically low level in terms of supplies.
In a report released earlier this week, the B.C. Real Estate Association noted the number of sales in October 2021 was almost 14 per cent lower than in October 2020.
This is driving prices up. The average listing price in the province was $964,777, up almost 20 per cent from the October 2020 average.
Essentially, buyers have less to choose from, and are having to pay more.
BCREA said it’s possible there may be some change coming up, but expects that change to be gradual.
“Rising mortgage rates should start to temper sales activity next year, but even with a moderation in demand it will take quite some time for the inventory of homes to return to a healthy level,” BCREA chief economist Brendon Ogmundson said in a news release Wednesday.
And while many associate skyrocketing prices with B.C.’s Lower Mainland, month-over-month data from the BCREA shows prices were up in most parts of the province.
In Northern B.C., for example, the average price in October of $403,101 was 16.5 per cent higher than in the same month the year before.
Vancouver Island saw the steepest change, with October 2021’s average ($726,691) 34.3 per cent higher than in October 2020 ($541,037).
Unsurprisingly, Metro Vancouver had the highest average price at $1,223,131, but the increase was 10.7 per cent over October 2020, so it may have been less of a shock to some buyers.
The South Peace River Region was the only area, according to the BCREA, that saw the average price drop.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
