HOME SALES TRENDS the rennie brief
WHAT YOU NEED TO KNOW ABOUT FIRST TIME HOME BUYERS • The proportion of completed-home purchases in Metro Vancouver attributed to first-time home buyers (FTHBs) dipped in 2021 vs the prior 3 years. • In spite of a recently lower share, the absolute number of first-time home buyers increased each year between 2018-2021. • Activity in the pre-sale market more or less mimicked this pattern, with the
FEBRUARY
First-Time Home Buyer Activity, Metro Vancouver DATA FROM GOVERNMENT OF BC PROPERTY TRANSFER TAX DATABASE
700
14%
600
12%
500
10%
400
8%
6%
300
200
4%
2018 4,343 FTHBs 8.3% of purchases
2019 4,644 FTHBs 9.6% of purchases
2020 5,114 FTHBs 8.8% of purchases
2021 5,602 FTHBs 6.8% of purchases
100
2%
0
0%
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112
PEOPLE ARE TALKING There has recently been some discussion of the waning participation of first-time home buyers (FTHBs) in Metro Vancouver’s housing market, so we decided to take a look at the data. How strongly do the numbers support this position? THE FTHB SHARE OF PURCHASES HAS DROPPED... BC’s Ministry of Finance has been collecting data on FTHBs (and making it publicly-available) since the beginning of 2018. When the monthly data are rolled up to annual totals, one can see that the 6.8% share of all purchases that FTHBs accounted for in Metro Vancouver in 2021 was a drop from the 8.8% in 2020. And while 2020’s FTHB share was below the 9.6% of 2019, it was higher than 2018’s 8.3%. So it’s unambiguous that FTHB purchasing participation, as a share of all sales, has recently dropped , though—at the risk of sounding pedantic—it’s a stretch to say FTHB participation is falling based on these data, as the FTHB share was more or less stable in the years 2018-2020. Compared to this period, 2021 is the outlier, so we’ll reserve further perspective on this front until the data begin to roll in for 2022 (noting the potential for the FTHB share to continue falling on the heels of a fairly precipitous month-to-month decline in
2021). ..BUT THERE IS A GROWING NUMBER OF FTHBS IN RESALE... Notably, the dip in FTHB share in Metro Vancouver’s housing market in 2021 did not reflect fewer FTHBs purchasing homes— to the contrary, the 5,602 FTHBs in 2021 equated to 10% more than the 5,114 in 2020. The 2021 figure was also 19% higher than the 2018-2020 average. As with their purchasing share, the number of FTHBs did decline through the final 6 months of 2021. This is something to watch. Having said that, the data are clear in painting a picture of rising FTHBs throughout the region. ...AND THEY’RE HOLDING STEADY IN PRE SALE Survey data that we’ve collected on FTHB participation in an increasingly active pre-sale market over the past few years (encompassing thousands of pre-sale transactions) shows FTHB shares remaining relatively stable (31% in 2019, 36% in 2020, and 31% in 2021). As with the BC government data, our data shows an increasing number of FTHBs in pre-sale, rising from 200, to 300, to 800 during this 3-year span.
For further information please contact Ryan Berlin (rberlin@rennie.com) or Ryan Wyse (rwyse@rennie.com). The information set out herein (the “Information”) is intended for informational purposes only. RAR & RMS has not verified the information and does not represent, warrant or guarantee the accuracy, correctness and completeness of the information. RAR & RMS does not assume any responsibility or liability of any kind in connection with the information and the recipient’s reliance upon the information. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information may change any time without notice or obligation to the recipient from RAR & RMS.
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