First-time buyer Jordan Hopper paid $383,500 for a place to call his own, getting a taste of what a difference a generation makes in Metro Vancouver's expensive housing market.
A couple of weeks ago, he signed a deal to buy a one-bedroom condo in the municipality of North Vancouver. Mr. Hopper, 22, is thrilled that he will be moving into the 632-square-foot condo in late May, though he admits it's a far cry from his parents' 2,400-square-foot detached home, which they bought for $336,000 back in 1996.
Mr. Hopper has adjusted his expectations. His parents' 53-year-old bungalow has tripled in market value to at least $1-million. The detached home is located a 15-minute drive away from his condo but seems a world away financially. Kids grew up with plenty of space in the neighbourhood of his childhood. "I played road hockey on the street and had all those sorts of things that come with growing up in a detached house," said Mr. Hopper, who now works in North Vancouver as an account manager at Vancouver City Savings Credit Union (Vancity).
Mr. Hopper said his generation got squeezed out of the market for detached homes many years ago.
The average price for new and existing detached properties sold within the city of Vancouver surpassed $1.9-million last year, up 173 per cent since 2005. Vancity forecasts that the average detached price within Vancouver's city limits could top $4.4-million in 2030, based on pricing growth in recent years, though real estate experts dismiss the projection as fantastical.
In Greater Vancouver – including suburbs such as North Vancouver, Richmond and Burnaby – average detached resale prices set a new high last month of more than $1.4-million, up 16.2 per cent from March, 2014.
The past decade has seen prices surge in the broader region called Metro Vancouver, which includes Greater Vancouver and less-expensive communities such as Surrey and Langley. The average detached price in Metro Vancouver reached nearly $1.1-million last year, up 114 per cent since 2005. Vancity's forecast for 2030 envisages an average price of $2.35-million for detached houses in Metro Vancouver.
"Condominiums will become a more common and desirable way to achieve the dream of property ownership," Vancity said in its recent report titled Downsizing the Canadian dream – Home ownership realities for millennials and beyond.
Mr. Hopper admits he isn't a typical millennial or Generation Y – people born between the early 1980s and early 2000s. He scrimped and saved $76,700 from working as a full-time teller during summers and Saturday shifts while studying at university. He also benefited from solid gains through investments in the stock market. He saved enough for a 20-per-cent down payment on the condo, built in 2008.
When he takes possession of the condo next month, he will be the first among his group of friends to own a place anywhere in Metro Vancouver. His friends live with their parents. Mr. Hopper said he is fortunate to have lived rent-free at his parents' Lynn Valley home while attending the University of British Columbia.
The millennial started to pay $300 a month in rent at home after he graduated last year with a bachelor of arts degree. As a student, he took public transit to and from UBC, taking buses 90 minutes each way. After graduation, he bought a 1985 Nissan Maxima for $500.
"My parents paid for food and university and that allowed me to save. I don't want to sound like a preacher, but you only have a small window of opportunity to amass a down payment," Mr. Hopper said. "The most important thing for me is taking the first step. I want to experience living on my own."
The housing industry promotes its Home Price Index (HPI) as the best benchmark. The HPI is a representation of the typical house in an area, providing a better barometer of real estate trends than average prices, which skew the picture because the most expensive properties sold are included, according to Cameron Muir, chief economist at the B.C. Real Estate Association.
The HPI in North Vancouver last month was $370,100 for condos and $1,111,200 for detached houses. The HPI on Vancouver's west side last month was $514,400 for condos and $2,447,700 for detached homes.