housing
NOT THEIR FIRST RODEO (THEIR FIRST PANDEMIC, YES)
First-time home buyers remained active throughout 2020 and look poised to represent a continued demand driver in 2021.
With the resale market continuing to be defined by elevated demand, constrained supply, and recently soaring prices, one would be forgiven if they figured this was a bad recipe for first-time home buyers. Perhaps surprisingly, the data show that first-time home buyers have been ramping up their participation in Metro Vancouver’s real estate market along with existing buyers since midway through 2020. For example, through the first half of 2020, first-time home buyers throughout the region tallied 2,066 purchases, or 8% of the total number of transactions regionally during that period. In the second half, first-time home buyers accounted for 3,048 purchases, or 9% of all sales. In comparing the second-half of 2020 to the first-half, then, first-time home buyers purchases were up 47%.
Interestingly, the 2,066 in the first half of 2020 was only marginally more than the 2,055 from the same period in 2019; significant divergence was then seen between the years’ second-halves, with 2020’s 3,048 being 18% above 2019’s 2,589. What is behind this trend? Low interest rates, accumulated savings, the Bank of Mom& Dad, and government relief measures all likely have been playing a role, more or less. As we do with existing homeowners, we see first-time home buyer activity to slow in the coming months as interest rates rise (marginally) and pre-existing, built-up purchasing power becomes spent—but it seems clear that first-time home buyers will continue to help shape the market for some time to come.
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