Real Estate Stepping Stones
The trend is very apparent when looking at what is happening with new development as builders are increasingly building townhouses and condo developments over detached homes. In 2002 throughout Greater Vancouver, the split between attached and detached construction was approximately 60/40, however today that number has grown to nearly 80/20, as prospective buyers are moving away towards the idea of strata living.
With the price of land ever increasing, and the strength of the North Vancouver Real Estate market showing no signs of slowing down, the affordability of land is getting out of reach for many buyers. Therefore, it’s no surprise that we see as many new developments along the Lonsdale and Marine Drive corridors as we do, as builders strive to meet the increasing demand for attached housing.
The MLS home price index benchmark shows that the median price has changed from just under $600,000 in 2005 to just over $900,000 today, across all Real Estate markets in Greater Vancouver. In North Vancouver Real Estate we see the benchmark price for detached houses at $950,000, slightly higher than the Greater Vancouver average. North Vancouver townhouses have a benchmark price of $575,700 and North Vancouver condos are at $350,000.
When reviewing these numbers, it’s no surprise that we see such a large trend towards condos and townhomes. If you’re looking to purchase a home with a value of $950,000 your down payment alone would be nearly $200,000. For many homebuyers, it is a stepping-stone process where most first-time buyers look at condo options as their market-entry home. After building up some equity in the home and saving up additional money for a down payment, they may start looking towards something a little larger to start a family such as a townhouse. The process continues, assuming further equity and savings are earned, and then families may have the down payment required to look into detached houses.
In today’s Real Estate market, especially that of North Vancouver, this sort of pattern is simply the reality for most residents. Furthermore, many first-time buyers are depending a great deal on their parents for financial support, most frequently in the way of down payment, to facilitate their first purchase. If that support is not available, prospective buyers may be looking at postponing a purchase for much longer while they continue to work on their down payment to make that first purchase.
The benefit to families that have been established in North Vancouver for a longer period of time, and the benefit to any long-term North Vancouver homeowner is that because of market growth and house prices being as high as they are, there has been a great deal of wealth generating simply by owning in a strong real estate market. It is not uncommon to speak with residents on the North Shore that paid less than $100,000 for houses that are now valued for well over $1,000,000, and that includes many homes that are still in original condition; simply due to the value in the land itself.
So, unless there is strong financial support from parents, perhaps those that have benefited greatly from North Vancouver market growth, many home buyers will need to consider the stepping stone approach to Real Estate and jump from property to property to finally make their way into a single family home.