First-time home buyers face uphill battle to own in the Lower Mainland: RE/MAX

It’s a dream that may elude people in the Lower Mainland for a lifetime — the dream of home ownership.

A new report from RE/MAX released Tuesday finds there are several obstacles in the way with few solutions to help get people into a real estate market that is wildly expensive.

Christopher Alexander, the president of RE/MAX Canada, says the odds are stacked against would-be first-time buyers.

“It is contributing to the decline in home ownership in Canada,” he told 1130 NewsRadio. “Homeownership in Canada peaked at about 69 per cent back in 2011 and 10 years later, we’ve declined by just over two-and-a-half per cent.”

He explains one of the main culprits is a lack of affordable options.

“In 1971, we were able to build 45,000 units of affordable units, and it took 25 years almost, from 1995 to 2019, to build the same number,” he stated.

Alexander believes the requirements to enter the market should ease up as interest rates slowly stabilize.

“You have the stress test in place, you have exorbitant development charges and fees, and prices are still really high, especially in Metro Vancouver. And all those factors combined, make it really difficult to enter the market.”

He points out it’s difficult even for people with high incomes to buy a home, especially in a region that continues to see population growth.

(Courtesy Statistics Canada, RE/MAX)

“If you don’t have equity already and you haven’t been in the market, the barrier for entry, especially in Ontario and British Columbia, is very high. You need to be making a very high monthly salary to be able to afford the payments on a mortgage,” he shared.

“For a lot of banks and lending institutions, you need 20 per cent down and when you’re average sale price is around $1.1 million, that’s $211,000 that you need to come up with just to have a downpayment.”

For so long the term “missing middle” was thrown around plenty when discussing housing in the Lower Mainland. Alexander acknowledges it’s an increasingly challenging balance for everyone to find a place that fits their budget.

“You have a geographical challenge as well, with the ocean [and] mountains. It is difficult to build the right type of units, but I think what we’ve been seeing is there are too many of the same units being built — small, entry-level condominiums and not enough affordable units that have a different layout where people can actually raise a family. It’s really hard to do that in 500 sq. ft.”

Ownership is just one issue highlighted in the report. The cycle of renting is also difficult to break.

“Affordable rentals are few and far between, and those renters fortunate to live in these units are unwilling and unable in some cases to move, presenting a conundrum to the market. Much of the housing stock available in the city and suburbs consists of either detached homes or condominiums. The attached home is the missing middle here. Demand for these types of homes is strong, yet the category represented just 20 per cent of the overall market in 2024.”

Alexander is calling on all three levels of government to nail down a cohesive plan on housing, instead of each pushing their own individual agenda.

With files from Mike Lloyd.