Cost of living in Vancouver got you down? How much can you afford to own? Why rent when you can afford more than you think? Struggling with heavy debts, wages that are not rising, millennials are fast becoming an endangered species in Vancouver.
Vancouver, a city of scenic mountains, amazing atmosphere, and access to the best the world has to offer, right from your doorstep. It has and will continue to rank as one of the most livable cities. There is an underlying issue, once you pull back the gloss of this city – it is the cost of living here.
Breathless yet? The average cost of a condo in Vancouver is currently $575,000.00 - now add in the fact that the average worker earns $27.21 per hour and a hard reality begins to emerge. The Housing Market in Vancouver has been making headlines for years, and it is no surprise that many find renting a modest one bedroom a real hit on the wallet.
Here are some current rates for the cost of renting in Vancouver:
One Bedroom: $2090.00 a month in Vancouver.
Two Bedroom: $3220.00 a month in Vancouver.
Now let’s do a basic breakdown of what the average household can afford at different income levels and typical mortgage payment sizes.
Want to have a place of your own in Vancouver? There’s no real caveat or special strategy - rather it comes down to having the confidence to make the jump and finding the right property. One tip - make sure you work with the right realtor who has specialized knowledge of the area you are looking to buy in. They can help you to find properties that are off market, create winning offers, and help you land a home of your own.
With vacancy rates getting lower and rental housing harder to find – people need to consider finding the right place to own. Most people do not often consider the fact that they could own their own home – becoming an owner looks more attractive every day.
Here are Three Things to Consider:
Buying your first home can be risky for anyone – the thought of debt can often stop a person. Most won’t consider the fact that by renting, you are losing money – instead, most people should be considering how to build equity. Often called the benefits-received principle – this simply states that a person who owns their home gets a benefit from paying off their mortgage, vs. paying rent. Instead of paying someone else for the use of their property, consider the idea that building equity makes your money last.
Take the 400 SF bachelor suite at the Villa Marquis right in the Heart of Vancouver – it has a large suit, with ground floor access, one parking spot, and a storage locker. All of this for $399,000 – now this might sound expensive, but it is a great find in a market that is crowded with increasingly expensive properties.
If you have a fixed-rate mortgage on a home purchase, your mortgage payment will never change. Unless a tenant is in a rent-controlled building or neighborhood, their risk of having their rent rise increases every year. Since the mortgage payment is the bulk of the owner’s housing price, it creates a significant budget stability.
Based on the above mortgage options, it’s a hard sell to still rent, given the fact that your living costs go down – but if you buy, your equity goes up. Add in that this bachelor suite has parking and a locker, and a new picture begins to emerge.
Now say you have a parking space, this is also valuable real estate that can be rented out. In Downtown Vancouver, this can net you $100 - $130 per month – helping you to start generating income from your property.
Haven’t bought your first place yet? The Canadian government offers a variety of tax breaks and credits that homeowners can take advantage of.
First Time Home Buyers Tax Credit – you can claim a non-refundable tax credit of up to $750 – which is based on a percentage of $5000.
GST/HST Rebate (New Housing Rebate) – If you are buying a new home as your principal residence, and if it is less than $450,000, you may be able to claim the GST/HST new housing rebate. BC residents can also claim on the provincial portion if they buy, build, or do a major renovation of their principal residence.
THE BC Loan Forgiveness Program – If you qualify for the BC Loan Forgiveness program, the Provincial government of BC will reduce the amount of your debt significantly.
The Feds also beefed up the amount of funding available for student loans that don’t need to be repaid, and it will be increased by more than $1.5 Billion over the next five years.
For many people, owning a home will make more sense financially and from a lifestyle perspective than renting a home. The benefits will often speak for themselves.
So why consider buying a home in Vancouver? The main benefit that if an affordable property is available in a great location, at a good price, it’s very important to consider taking action. Take the Studio at the Villa Marquis for example - it has great parking, an amazing location, and a decent size for a good price. It’s all about taking the leap and realizing you can afford more than you think.
