B.C. millennials are jumping on the chance to buy homes, after a pause in the market early in the pandemic according to a new survey from Royal LePage.
Interest rates have dropped making borrowing costs lower than they’ve been in decades.
“I’m getting millennial clients come with pre-approved fixed five year mortgages of 1.5 per cent. I have never seen rates that low,” said Vancouver-based real estate agent Adil Dinani.
What’s unique this time is that house prices also dipped, so for once in a blue moon home buyers got low prices and low mortgage rates.
Dinani called it a rare alignment.
“It’s given an opportunity to buyers who thought they were priced out, or for whom the prices were unattainable. It’s not pushing folks into something they wouldn’t have done, it’s just letting them get in sooner than they would have expected,” he said.
In the first few months of the pandemic, everything slowed down, including home sales. Properties that were already listed dragged on while people waited to see what the COVID-19 fallout would be.
And so inventory piled up, and interest rates stayed low.
“In the beginning people were just thinking about how to manage life, let alone buy a home. But now that they’re feeling more comfortable about things, including job stability, they’re getting into the market. I haven’t seen this segment of the market so active in probably three years,” Dinani said.
By now, he says the condominium market has bottomed out, and detached homes are already high again — in some areas as high as the 2017 “euphoric” market.
Royal LePage predicts prices will be nine per cent higher, on aggregate, than last year, and Dinani’s already seeing price half-way to that mark.
While low interest rates remain a good opportunity for buyers, he warns against making emotional the fear of missing out. Usually a term used to describe missing out on social events, Dinani said he’s starting to see it where first time homebuyers are being outbid of three, four, five even six times before finally getting to close the sale.
“You almost get fatigued to a certain point where you’re just like, let’s just get this done.”
The survey, which interviewed 2,000 subjects, found that almost half of 25 to 35 year-olds in B.C. already own their own home, and a quarter of them bought their first home during the pandemic.
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