Moving from a condo to a home is easier in Kamloops than the Okanagan
The standard thinking in the housing market is that first time home buyers can start small then move up as they build equity in their homes.
For most these days, that first home is a condo because that’s all people can afford in a time of high prices and ever-rising interest rates.
In order to get into that starter home, it can take a renter well over a decade to put together the down payment.
New data from Point2, an international real estate analyst, shows that it can take another half decade in the Okanagan to save enough to move from the condo to a single-family home.
That time is cut in half in Kamloops but it will still take 2.7 years to bridge the gap.
In Kamloops there is a $226,425 difference between the benchmark, or typical, condo price and a single-family house.
That's the smallest gap out of the dozen BC cities that Point2 provided data on for iNFOnews.ca.
Penticton ranked second in BC with a $292,821 difference between the price of a condo versus a house. But, given that the median after-tax household income in Penticton is about $18,000 a year lower than in Kamloops (which is $85,301), it will take 4.3 years for a Penticton condo owner to save enough to make the move.
In Vernon, the gap is $385,407 so it would take 5.3 years to move up while the Kelowna difference of $452,998 would require 5.6 years.
The relatively small time difference between the two cities is due to the fact that the median household income in Kelowna is $80,379, about $7,600 more than in Vernon.
The worst place in the country to transition from a condo to a house is Vancouver. It shows a difference of more than $1.2 million. It would take the condo owner 15.8 years to save enough to move into a house.
“Houses in Canada are nearly 40% more expensive than condos,” the Point2 report says. “This tough pill to swallow means that, at a national level, it would take more than two years’ worth of income to cover the $214,600 difference. And, in a market defined by chronically increasing interest rates and steady demand, the idea that homeowners can comfortably one-up their residence is unlikely.”
READ MORE: Kelowna builder making home ownership more affordable by going small
While Kamloops has the smallest price difference in BC, single-family houses are still 58% more expensive than condos.
The Point2 national data doesn’t break down the years-to-move-up ratio but it does show 14 cities where the difference between condo and house prices is 2% or less.
Topping that list is Trois-Rivieres, Quebec where there is only a $44,000 difference, or 0.8%. Single-family houses cost $280,000 there.
Half the cities on that more affordable list are in Quebec.
In Vancouver, the price difference is 153%.
In Penticton, single-family houses are 68% more expensive than condos. The difference is 112% in Vernon and 88% in Kelowna.
See the full Point2 report here.
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