The modest plans of two recent BC lottery winners highlight the challenge potential homeowners face in today’s real estate market.
The men, who recently won $500,000 each, do not live in the same area of BC, are not the same age, and did not live in the same conditions.
A young man from Coquitlam who won his prize in a BC/49 drawing said he woke up his mother to share the good news.
He told the BC Lottery Corporation that the win will change his life, allowing him to… buy a small apartment and leaves his parental home.
More than 900 kilometers away, in the small village of Fraser Lake in northern BC, another man has a similar plan. He won his half million in a Lotto Max drawing this fall and said the money will help him achieve it a goal he has had for a long time.
The winner told BCLC that he has been a tenant for years and wanted to enter the housing market, but the lottery winnings were needed to enable him to buy a house.
These winners were, of course, lucky.
Others have to lean on their parents, if they are lucky enough to have relatives who can help. A recent study suggested that parents cough an average of $180,000 to help their grown children enter the Vancouver real estate market – the most expensive housing market in the country.
The CIBC report highlighted a widening wealth gap in the country, finding that nearly a third of new buyers need money from mom and dad to put aside enough money.
Last month, a real estate agent told CTV News Vancouver that it is now common for buyers to need help, and not just people in their 20s and 30s.
There are several factors at play, including that it is so expensive to rent.
“It’s really unusual for someone to have $100,000 or $200,000 saved by the time they’re in their 30s just by working and saving,” Vancouver real estate agent Kate MacPhail, of Stilhavn Real Estate Services, said in October. “Most of my clients are already paying $2,500 a month or more in rent. Some of those who have kids pay $4,000 a month for a three-bedroom house, so it’s almost impossible for most people to save on top of that.”
And the challenges of saving enough are not helped by continued price increases, making even starter homes out of reach for many.
Prices in BC have been high for years and at the moment the market is at a historically low level in terms of supply.
In a report released earlier this week, the BC Real Estate Association noted that sales in October 2021 were nearly 14 percent lower than in October 2020.
This drives up prices. The median sales price in the province was $964,777, up nearly 20 percent from the October 2020 average.
Essentially, buyers have less to choose from and have to pay more.
BCREA said it is possible that some change is on the way, but expects that change to be gradual.
“Rising mortgage rates should start dampening sales activity next year, but even with subdued demand, it will take some time for home inventory to return to healthy levels,” BCREA chief economist Brendon Ogmundson said in a press release Wednesday. .
And while many associate sky-high prices with the lower BC mainland, month-by-month data from the BCREA shows prices rose in most parts of the province.
In Northern BC, for example, the average price in October of $403,101 was 16.5 percent higher than the same month the year before.
Vancouver Island saw the strongest change, with the October 2021 average ($726,691) 34.3 percent higher than October 2020 ($541,037).
Unsurprisingly, Metro Vancouver had the highest average price at $1,223,131, but the increase was 10.7 percent from October 2020, so it may have been less of a shock to some buyers.
The South Peace River Region was the only area where the average price fell, according to the BCREA.