Speculation surrounding Vancouver these days would tell you that it’s an impossible market for first-time homebuyers to get into, but, according to a study from RedPin.com, it’s a better buy than Toronto.
“The conventional belief is that Vancouver prices have skyrocketed and there is a huge financial barrier to entering the local housing market,” Rokham Fard, CMO and co-founder of RedPin.com, told CREW's sister publication REP.
“However, research shows that, although Vancouver housing prices are significantly higher on average, first-time buyers in Vancouver spend an average of $420,000, compared with $425,000 in Toronto, making first-time home purchases actually lower than Toronto prices.”
The comments contradict a whirlwind of speculation that Vancouver’s real estate market is virtually impossible to get into, lacking affordable options for first-time homebuyers.
In March, 40 per cent of all homes sold in the Greater Vancouver Area were condos, compared with on 22 per cent in the GTA.
According to Fard, the fact that Vancouver has just one land transfer tax to deal with while Toronto has two also highlights Vancouver as a more attractive destination and investment spot as opposed to the GTA’s hottest market.
Investors pay $8,800 in tax on a $500,000 home in Vancouver compared to $12,200 in Toronto.
“Vancouverites come out way ahead on land transfer taxes by only paying provincial dues,” Fard said. “Unless you're a first-time buyer in Toronto, you get a double hit of both municipal and provincial land transfer taxes. This can add up to serious money on a market-priced home.”
He added that Vancouver and other B.C. locations have more stability in terms of the weather, making for a more active market year-round, whereas spring and summer are typically the strongest seasons for GTA sales.