Insights Into First-Time Home Buyer Trends in Vancouver

Background

Recently, the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board commissioned the Mustel Group to carry out a study of residential home buyers and sellers in 2008. This survey included 705 respondents from the REBGV and 395 from the FVREB.

This is a fantastic survey that looks at the real estate transactions of these 1100 respondents in minute detail. The information contained within is invaluable to real estate investors, first-time buyers, realtors and anyone that is interested in Vancouver real estate.

Vancouver First Time Home Buyers

What jumps out at me most when looking at this chart is how the number of first-time home buyers declined from 2006 through to 2008. 31% of respondents were first-time home buyers in 2006 and only 22% of respondents were in 2008.

My interpretation of this is that first-time home buyers stopped buying in 2008. The market was still strong at the beginning of 2008, but most first-time home buyers were priced out of the market. To a large degree, affordability was why the music stopped (along with declining consumer confidence that was the result of what was happening in the United States) and many first-time buyers stopped looking at a real estate purchase as a viable option.

Vancouver First Time Home Buyers

From mid-summer of 2008 through to the end of the year first-time buyers were almost non-existent in the marketplace. They did not HAVE to buy and so they didn’t. Along with investors, they were probably most obviously absent from the Vancouver real estate landscape in the latter half of 2008…and I think that this data supports that.

Where did they go?

The data also suggests that while first-time buyers disappeared in Vancouver, they may have been looking in the Fraser Valley (where prices were less and affordability not as great of an issue). Of course, this is hard to prove or measure precisely as there is no comparable data for 2006 for the Fraser Valley.

If this same survey were done today, I suspect that we’d have a far higher percentage of first-time buyers. It is the first-time buyers that are most active and are really driving the turn-around (dare I say it?) of the Vancouver real estate market.

If you are a first-time home buyer in Vancouver, contact me to get started in your search. It’s important to work with a real estate agent that has the experience and knowledge to help you navigate the Vancouver real estate market.

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