B.C. real estate market: For 2 residents, it took winning the lottery to buy their first homes
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.