Young homebuyers taking a surprising share of Vancouver Island’s market
Boomers downsizing, helping their children enter the market
The number of young homebuyers purchasing on Vancouver Island is on the upward trend, despite the benchmark price of a single-family home sitting at $851,700.
That’s the unexpected trend Island Realm Real Estate CEO Tony Zarsadias has been noticing since the pandemic began in March 2020.
“It’s not like young homebuyers are forming the vast majority of home purchases, that would be inaccurate, but what we are seeing though is that there are more than people would think,” explained Zarsadias.
In April for instance, Zarsadias said one-third of his firm’s buyers were under 40, a surprising stat considering home prices have climbed around 30 per cent in the past two years. While it may be difficult to predict whether or not this trend will continue on the Island, there are some clues as to why it is happening now.
There are a number of reasons why this trend has emerged over the pandemic, but one of the most significant is baby boomers downsizing into smaller, cheaper homes.
Zarsadias said while that has been a trend for some time now, what’s different is the older homeowners are taking the profits from the downsizing process and investing that equity in their children, who are then using it to get into the housing market for the first time.
But young adults with bank accounts boosted by their parent’s money only explains part of the trend.
“We are also seeing a lot of young professionals, which because of the pandemic allowing people to work remotely, are coming to the Island, especially if they are coming from more expensive markets,” he said. “People of all ages come to the Island because they want access to nature, they want to live island life. It’s clear when people have the opportunity to not be tied geographically to their jobs, there is a drive to the Island.”
This young homebuyer trend is being seen across the Island, with the exception of the most expensive markets, which include downtown Victoria and other parts of Greater Victoria.
Zarsadias said there is also a significant trend in terms of the types of homes being purchased by these young homebuyers.
“The rise of the townhome is a trend I think we are going to keep seeing for the next decade,” he said. “You still get a yard, that single-family home ground feel, but you don’t have the price of a single-family home. Townhouses are definitely trending, and if you asked me five years ago I would tell you there is no market for townhouses.”
Overall, it’s a trend Zarsadias sees as a good thing. He said homebuyers of all ages coming to the Island tend to treat it as their end destination and stay for the long-term, rather than moving elsewhere after a few years.