If you follow housing news and trends, you might be under the impression that it’s impossible to become a home owner in B.C., but that’s a misconception. Just look at Sarah, a public employee, and her partner. They bought a three-bedroom, two-bathroom townhouse in the city of Victoria in 2020. The couple knew that buying a home anywhere in B.C. would be a challenge, so they went about the process of becoming first-time home buyers with a methodical determination.
For many B.C. first-time home buyers, especially those located outside of Metro Vancouver, home ownership is still within reach—but it takes careful planning, and sometimes a little help from the government.
Step 1: Create a personal savings plan
Real estate prices in B.C. are famously high, and first-time home buyers who don’t have an existing house to sell face steep entry barriers. Between May 2021 and May 2022, the average price of a home in B.C. rose more than 8%, reaching close to $990,000. Plus, with fewer houses on the market than usual, buyers must compete for a limited number of available properties.
To overcome the affordability challenge, Sarah and her partner started saving for their down payment well in advance. “We started in 2018,” Sarah says. “I opened an account on a whim and started an auto-deposit. It wasn’t much per month, but seeing the funds grow convinced my spouse to do the same thing.”
As their small contributions added up, the couple realized that home ownership was a viable option. Not sure if it’s feasible for you? MoneySense has calculators to help you estimate the costs of buying real estate in B.C.
Step 2: Consider your down payment options
In Sarah’s case, those saving habits paid off. The couple was able to put down a 6.5% down payment on a $580,000 townhome in Victoria, a combination of their own substantial savings and a $20,000 family gift. That’s not an option for everyone; however, it has become more common recently. Last year, CIBC Economics found that around 30% of first-time home buyers received a gift from their families to put towards a new home—the average gift amount was $82,000.
Still, Sarah and her partner could have taken advantage of government programs like the Home Buyers’ Plan (HBP), which lets first-time home buyers borrow from their registered retirement savings plan (RRSP) in order to buy or build a home.
Forgoing government assistance programs could have been a mistake, says Romana King, author of House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth. “I think they missed out on a great financial tool that makes home ownership (and mortgage repayment) more manageable and less costly.”