B.C. Property Market: How Minimum Down Payments Have Changed During the Pandemic

Since the beginning of the pandemic, the minimum down payments for homes in British Columbia (B.C.) have increased, according to a recent report by Zoocasa. As a result, residents face the highest average property prices in Canada, making housing affordability a pressing issue in the province.

The report calculates the minimum down payment needed based on a tiered percentage structure, depending on the home’s value. For homes valued at $500,000 and under, a 5% down payment is required, while homes priced between $500,001 and $999,999 require a 10% down payment. Homes priced at $1 million and over necessitate a 20% down payment.

Out of the 18 B.C. municipalities studied, the down payment needed for an average detached home increased by over $100,000 in 10 markets. The largest down payment increase since February 2020 was observed in Surrey, where benchmark home prices rose 39% to $1,390,300. Homebuyers now need an average of $278,060 to buy a property in Surrey, compared to $74,790 pre-pandemic.

In contrast, Vancouver West experienced the lowest down payment change, with an average increase of $37,820. However, homebuyers still need to pay a minimum down payment of $620,620 in this area, compared to $582,800 in February 2020.

Condo markets in B.C. have also seen average down payment increases, although the changes are less extreme than in detached homes. Only two condo markets out of the 17 tracked experienced down payment increases of more than $25,000 since the start of the pandemic. West Vancouver saw the most significant down payment increase, with an average property price of $1,228,900, while Vancouver West’s condo market increased the least.

This situation has led to a record-high number of non-owners believing they will never be able to buy a family home, as revealed by a survey conducted by Mortgage Professionals Canada. The survey also found that although some housing markets have dropped over the past 12 months, Canada’s least affordable markets, like Vancouver and Toronto, are not expected to return to affordable levels in the foreseeable future.

The housing affordability crisis is particularly evident in Ontario and British Columbia urban centers, where average house prices are 23.5 and 23.3 times the average disposable income, respectively. This ratio is much lower in Quebec, which stands at 13.3 times.