Purchasing a home is still a huge challenge for most residents in Greater Vancouver. At current interest rates, a first time homebuyer earning the media household income of $75,000 will only qualify for a $300,000 mortgage. That’s far short of the benchmark price of $695,000 published by the Real Estate Board of Greater Vancouver. Our hypothetical household would have to save up $395,000 cash to purchase that condo! Short of a very generous gift from the bank of mom and dad, saving this much money is beyond the ability of most households – particularly given how much faster house prices have been rising than savings!
But what about older households who have been saving longer, or more affluent buyers? Consider the data from Statistics Canada:
| $200,000 and over | 12.6% | Over $850,000 |
| $150,000 – $199,999 | 9.8% | $620,000-$850,000 |
| $100,000 – $149,999 | 17.8% | $395,000-$620,000 |
| $50,000-$99,999 | 30.1% | $165,000-$395,000 |
| Under $50,000 | 29.7% | < $165,000 |
The price of a “representative” townhouse is over $1 million, meaning that less than 10% of first time buyers can step directly into townhouse ownership.
In the distant past, young families bought a detached home as their “starter”. More recently, young families might have started with a condo, then stepped directly into a detached home. Today, however, the price gap between condos and detached homes is simply too great. Townhouses provide a more affordable, and indeed sustainable, option for families to grow into.
