2015 REW.

CA READERSHIP SURVEY
Lower Mainland Home Buyer Expectations and Realities Revealed

EXECUTIVE SUMMARY

REW.ca, the Lower Mainlands most comprehensive source of real estate information, conducted an online
reader survey in June 2015. A total of 399 respondents took the 28-question survey. Their answers offer a
snapshot of consumer preferences and expectations regarding buying and selling homes in todays hotter than
ever market.
The survey reveals that many buyers expectations in terms of size of home and location are often greater than
what they appear to be able to afford. When it comes time for them to make offers, they may find they have to
opt for homes more in their price range. Clearly, home ownership in the Lower Mainland remains possible when
buyers have realistic expectations based on a true understanding of the market.
Joannah Connolly, editor and content manager of REW.ca and Real Estate Weekly, said, With the benchmark
price of a home in Vancouver sitting at around $700,000, and this city being the most popular location of choice
for our respondents, its interesting to note that nearly 70 per cent of local homebuyers are expecting to spend
less than $700K on their new home. This tells me that the headline prices we see in the city are skewed by skyhigh land costs and luxury home sales, and are not truly reflective of whats happening in the day-to-day market
across all property types and neighbourhoods.
The influence on buying power of one factor in particular cannot be underestimated: financial assistance from
family members. A little over half (53 per cent) of all respondents not just first-time buyers indicated this
as one of the sources that would fund their down payment. One-third also said inheritance would play a role
in their purchase. These game changers are influencing buyers beliefs that they can afford homes with larger
price tags, even when they have lower incomes.
Janai York, publisher of Real Estate Weekly, said, While much news has been focused on the rise of real estate
prices due to foreign investment, what has been reported as the biggest wealth transfer in history from babyboomers to their children seems to be fuelling local buyer activity quietly in the background. This held true
across all age demographics. Three-quarters of first timer respondents anticipate help from the Bank of Mom
and Dad to form a down payment, while even 64 per cent of upsizers in the 41-50 age bracket expected some
financial help from family as well.
Densification is a hot topic in our real estate market, with Lower Mainland municipalities calling for more new
housing to accommodate anticipated population growth. The survey found that support for densification appears to increase with household income a surprising result given that densification is often touted as a way
to address affordability concerns, which could be expected to resonate more with lower income groups.
York added, Townhomes and studios stood out as fall-back choices for affordability, rather than primary
choices, when entering the property market. This is interesting as micro-units and townhomes are touted as
the solution to affordability.
Respondents appeared to have mixed feelings about whether Lower Mainland housing is a good investment or
overvalued. Given that 77 per cent of the survey takers indicated buying a home here was a good investment
while 74 per cent felt homes in the area were overvalued, it may be that the word overvalued was seen as
synonymous with expensive.
Although this survey gives us an unprecedented insight into the home buying intentions and real estate market
opinions of Lower Mainland residents, its important to note that the respondents of this survey are a selfselecting group that are not necessarily completely representative of the local population. Most are already
would-be home buyers and current home owners, and the average incomes tended to be slightly higher than
the Lower Mainland norm. Furthermore, the survey questions were not mandatory, so some of the sample sizes
may be smaller than the total of respondents, where some respondents chose not to answer or the question
was not applicable.
Further information on the demographic breakdown of the respondents can be found on page 11 of this
12-page report.

LOCATION

The old real estate mantra of location, location, location continues to ring true with both first-time buyer
and existing homeowner respondents. Approximately one-third of all respondents are looking for homes in
Vancouver; this proportion was the same among first-time buyers. However, Burnaby, New Westminster and
the TriCities were more popular among first-time buyers.

Survey respondents were asked which neighbourhoods they were looking in. The chart on the left
represents all respondents, while the one on the right is first-time buyers.

Just over 70 per cent of respondents expect to move neighbourhoods when they make their home purchase.
An analysis of all respondents and first-time buyers indicates that Vancouver is the most desired neighbourhood for both groups.

BUDGETS AND ASPIRATIONS

Just less than 40 per cent of respondents are looking for a detached house and 68 per cent have less than
$700,000 for their budget. While the July 2015 benchmark price for a single family detached house in Greater
Vancouver of $1.14 million may make these expectations appear to be a pipe dream for some, it could also indicate that benchmark prices, like averages, are skewed upwards by the high cost of land and high-end homes.
Statistics from the BC Real Estate Association have indicated that nearly 70 per cent of home sales in 2014
were below the average price of $738,000. In 2014, 32 per cent of Metro Vancouver homes went for less than
$400,000 and 82 per cent sold below the $1 million mark. Thirty-four per cent of respondents to this survey
intend to spend less than $400,000 for a home, which is in line with the BC Real Estate Associations abovecited findings.
The highest proportion of first-time buyers (40 per cent) expect to purchase a condo, rather than a townhome
or house. Some 56 per cent of first-time buyers expect to spend more than $400,000 and 63 per cent have a
budget of less $550,000. The July 2015 benchmark price for condos in Greater Vancouver was $400,900.

YOUNG BUYERS

Eighteen per cent of the survey respondents were under 30 and the total household income for more than
50 per cent of these respondents was under $70,000. The largest proportion, around 40 per cent, of this age
group are intending to buy a condo (the same percentage as among first-time buyers), with about 22 per cent
looking for a townhome and 25 per cent hoping for a house.
The vast majority (just over 70 per cent) of the under-30 respondents are first-time buyers, and yet 75 per
cent reported their budget range as being over $400,000 (close to the average price of a condo in Greater
Vancouver).
The Bank of Mom and Dad plays a critical role for many of these purchasers. Three-quarters of
respondents aged 21-30 list help from their families as one of the key ways they intend to fund their down
payments.

Most 21-30 year old respondents are first-time buyers yet many expect two or more bedrooms in their first home. No respondents were looking
for studio units

EXPECTATIONS AMONG HIGHER AGE AND INCOME GROUPS

Respondents aged 31-40 had more buying power than their younger counterparts and with that came higher
expectations. Close to half (47 per cent) intend to purchase a detached house and most (73 per cent) have a
household income over $70,000. More than a quarter of respondents report earning up to double that, with an
annual household income from $110,000 - $150,000.
Many in this age group (63 per cent) are current homeowners and 69 per cent say they want three or more
bedrooms in their next home. More than half will use the sale of their home to help with the down payment; 42
per cent also hope their families will help them out.
The 41-50 age group continues to look to Mom and Dad; 64 per cent of these respondents said they expected
help from their families with the down payments on their new homes.

The downsizing trend among the 51-64 age group is clearly seen in this chart, which breaks down reasons for selling their home by age

The 51-64 group revealed that the trend for downsizing at this age continues. Of all those who said they were
selling their place to buy a smaller home, 46.3 per cent were in the baby-boomer age group. More than 51 per
cent of 51- to 64-year-old homeowners said they were selling because they were looking for a smaller home.
With 33 per cent of them having 50-99 per cent of the homes value to put down, its perhaps unsurprising that
the same proportion was expecting their monthly costs to decrease. And 31 per cent of all those looking for a
condo were above the age of 51.

IMPACT OF HOUSEHOLD INCOME

The survey respondents were predictably a higher-than-average earning group, being would-be home buyers
and current home owners. Some 50 per cent had a total household income of more than $90,000 and 63 per
cent were above the perceived Greater Vancouver average of around $70,000 a year.
Most of the survey respondents who already own a home, even the high earners, carry a mortgage, with 19 per
cent owning their home outright.
The higher the income, the more likely respondents were to intend to purchase a detached house. Conversely,
and predictably, the lower the income, the more likely the intention was to purchase a condo. Interestingly,
townhomes were never the top choice in any income bracket.

Respondents home preference was guided by their annual household income level

IMPACT OF HOUSEHOLD INCOME (CONTINUED)

Respondents with household incomes of less than $50,000 showed interesting responses when it came to
housing costs. Some 44 per cent of respondents in the lowest income category expect their monthly housing
costs after they move to remain about the same as they are currently paying. This perhaps reveals a frugality
among this income group and a recognition that they would not be able to afford an increase in expenses. In
general, the further up the household-income category, the more willing the respondents were to absorb a rise
in monthly expenses.

This graph indicates how survey respondents anticipate their monthly housing payments (including fees and taxes) will change
compared with their current or previous payments in relation to their annual household income

The highest proportion of first-time homebuyer respondents (29 per cent) fall into the under $50,000 household income category, and a total of 68 per cent bring in less than $90,000. Forty per cent of them expect to
purchase condos and yet 41.7 per cent of respondents are looking for three or more bedrooms. While their
generally lower income may imply that their immediate housing goals are unrealistic, this may not in fact be the
case as many of these people are benefiting from the transfer of family wealth: 57 per cent list financial aid from
family as one of the ways they will fund their down payment.
Among first-time buyers, the highest proportion of respondents (27 per cent) expect to put down 20-29 per
cent on their new home, and a combined total of 44 per cent of first-timers expect to have more than 20 per
cent down payment. So its clear that this groups home-buying intentions are being supported by considerable
personal and family wealth.

IMPORTANCE OF TRANSIT

The survey posed two questions regarding transit: How important is transit in deciding where you live? And: If
youre buying a home, are you planning on buying within one kilometre of a transit hub or major transit route?
Eighty per cent of respondents considered transit as an important factor in determining where they live with
46 per cent saying they were planning to buy close to a transit hub or major route. Transit was most significant
to those 30 and under, with 84 per cent rating it very or somewhat important. Likewise, the 21-30 age category
was the one most likely to purchase close to transit (57 per cent).
All income levels agreed that transit is important when choosing a home. Interestingly, it appears the most
important to respondents with a household income of $50,000-$69,000 with 89 per cent of those respondents
citing that it was very or somewhat important to their home-buying choices.

Transit was seen as important across all household income brackets and was especially strong among those
with an annual household income of less than $70,000

OUTLOOKS ON DENSIFICATION

Just saying the word densification out loud seems to hit a sore spot for many people, yet in terms of survey
respondents, most (61 per cent) felt it was either essential/important or generally a good thing. Twenty-seven
per cent of respondents did not know and only 12 per cent were willing to label densification as generally a bad
thing. Opinions were similar across all age categories.
Remarkably, support appears to increase with household income. Fifty-eight per cent of respondents with
household incomes of less than $50,000 feel positively about densification compared with 74 per cent of those
in the $150,000-$199,000 bracket. This finding defies popular perception that lower-income buyers, who are
less able to buy single-family homes, would support the supply of more housing. Instead, it tends to point to the
downsizing and condo-purchasing habits of the older (and generally higher-earning) age groups, and perhaps
even the widespread aspirations of younger (generally lower-earning) respondents to eventually own a house.

Support for densification generally increases with household income

IMPRESSIONS OF HOUSING AND ITS INVESTMENT VALUE

Respondents across the board felt that on one hand buying a home in the Lower Mainland is a good investment
(77 per cent) but on the other saw homes in the area as overvalued (74 per cent).
Support for the statement buying a home in BCs Lower Mainland is a good investment was strongest
amongst those respondents with household incomes between $90,000 and $109,000 (86 per cent of that categorys respondents) and with those aged 21-30 (86 per cent of that groups respondents). When broken down
into first-time buyers and existing homeowners, 75 per cent of first-time buyers agreed with the statement
compared with 80 per cent of homeowners.
In responding to the statement homes in BCs Lower Mainland are overvalued, agreement was highest
amongst those respondents with household incomes of $50,000-$69,000 and $90,000 - $109,000 (81 per
cent in both categories). The sentiment was strongest with respondents aged 31-40 (79 per cent) and with
first-time homebuyers (80 per cent), compared with 71 per cent of existing homeowners who agreed (illustrated below). As so many respondents agreed that real estate in Vancouver is a good investment, these latter
responses suggest that the word overvalued was seen as synonymous with expensive.

PERCEPTIONS OF FOREIGN INVESTMENT

Foreign ownership always a hot button was seen by 69 per cent of respondents as pushing up local home
prices and 60 per cent would like to see limits placed on foreign ownership.
Support for the statement foreign ownership is pushing up local home prices was strongest amongst the
21-30 age category with 72 per cent of respondents agreeing, and weakest among those aged 65-plus (60 per
cent). Respondents with household incomes in the $70,000 to $89,000 range were most likely to agree (78 per
cent) and was stronger among first-time buyers (76 per cent agreed) than current homeowners (71 per cent).
Regarding the statement limits should be placed on foreign ownership, agreement was highest amongst those
earning $70,000 to $89,000 (69 per cent of respondents) and among those in the 31-40 age category (63 per
cent). First-time homebuyers were more likely to agree with the statement (74 per cent) than existing homeowners (57 per cent), illustrated below.

COMMENTS REGARDING AFFORDABILITY

Survey respondents were offered the opportunity to provide feedback on housing affordability in
Vancouver and the Lower Mainland. Following is a selection of their responses.
A resident of Surrey earning $200,000+ a year with an $850,000 to $1 million budget for a six-bedroom
home said, Local residents should pay lower property transfer tax and foreigners should pay the full
amount. Foreigners should also pay a slightly higher property tax so when the home is vacant it can be
maintained by the city to keep the neighbourhood and values up.
A millennial earning under $50,000 living with her parents and not aiming to buy commented, I feel that
with the average persons salary it is nearly impossible to own a home without going in with another person on a mortgage.
A respondent from Lower Lonsdale who has a household income of $200,000 a year and is not buying a
home remarked, The only problem is with detached homes in specific areas. Many areas have not seen
any price increase in years. The problem is that people are not told this.
A first-time homebuyer aged 31-40 earning between $70,000 and $89,000 and looking for a oneedroom condo in North Vancouver for under $400,000, said, Prices are expensive but not impossible to
buy something small to start with. People starting out often have unrealistic expectations and dont want
to make any compromises in their lifestyle i.e. eating out all the time instead of once a week.

DEMOGRAPHIC BREAKDOWN

REW.ca surveyed total of 399 respondents using a 28-question survey. The respondents live throughout
the Lower Mainland, from Squamish and the Gulf Islands through to South Delta and East Abbotsford,
and everywhere in between, plus a couple of out-of-area respondents searching for Lower Mainland
homes.
Just over 18 per cent of respondents are under 30 years old; 24 per cent are 31-40; 23 per cent are
41-50; 25 per cent are 51-64 years old and 10 per cent are aged over 65.
Sixty-three per cent of respondents are female; 37 per cent are male.
Just over 50 per cent of respondents currently own a home with a mortgage. Twenty-two per cent are
renting their home, and seven per cent live with parents/family, A little more than 18 per cent currently
own their home outright.
Of the respondents who are looking to buy a home in the next 12 months (55 per cent), 35 per cent are
first-time buyers and 65 per cent have purchased a home before.

Those with a total household income of less than $50K a year make up 20 per cent of the respondents.
Some 16 per cent bring in $50-69K a year; nearly 14 per cent are in the $70-89K range; 17 per cent have
a household income of $90-109K; 18 per cent earn $110-149K a year; 10 per cent bring home $150199K annually and 5 per cent earn a total of $200,000 or more.

For more information and media inquiries, contact REW.ca editor Joannah Connolly at jconnolly@rew.ca
Real Estate Weekly Ltd Partnership, 2015

WE LIVE WHERE YOU LIVE.