Getting on the Metro Vancouver Property Ladder

As a prospective homebuyer, you may have heard the expression to "get on the property ladder." Many homebuyers, especially first-time buyers, may be wondering what a property ladder means and how it applies to Metro Vancouver and the Fraser Valley housing markets.

WHAT IS THE PROPERTY LADDER?

The term "property ladder" refers to the concept of gradually acquiring more valuable properties over time. It represents the process of moving up in the real estate market, usually starting with more affordable or modest properties and progressing to more expensive or higher-value ones.

Getting on the Metro Vancouver area property ladder typically involves purchasing your first property, often referred to as a starter home or an entry-level property. This initial purchase can be made through a combination of savings and obtaining a mortgage loan from a bank or financial institution. The specific requirements for obtaining a mortgage may vary based on factors such as your credit score, income, and the lending institution's policies.

Once you have purchased your first property, you can begin building equity by making mortgage payments and potentially benefiting from any appreciation in the property's value over time. As you gain equity and increase your financial stability, you may consider selling your current property and using the proceeds to upgrade to a more valuable or desirable property. This process is commonly known as "climbing the property ladder."

Climbing the property ladder often involves repeating the steps of buying and selling properties, using the accumulated equity and potential profits from each transaction to move up to higher-value properties. This can be achieved through strategic property investments, savings, and the management of your finances to increase your borrowing power and overall wealth.

HOW MIGHT THE PROPERTY LADDER WORK IN METRO VANCOUVER AND THE FRASER VALLEY?

It is widely known that home prices in the Lower Mainland and Fraser Valley housing markets in and around Vancouver, BC are incredibly expensive. Prices are shockingly high for many buyers just entering the residential real estate market. But there may be options for new or younger buyers to get on the property ladder and make their first couple of moves.

For example, buying an entry level home might mean choosing a relatively lower priced market or property type. For most, that might mean starting out in a condo apartment, with respect to a cheaper property type. Over time, these homeowners might use built-up equity to purchase a townhouse the next time. For some, this might be a satisfactory property type that offers enough space and convenience. For other property owners, they might continue to have aspirations to move further up the property type ladder and into a detached house, acreage or farm even. Every homeowner is obviously unique and has different goals, relating to what type of home they'd like to own.

For others, they might choose to pick a specific geographical housing market in the Fraser Valley, that offers relatively better affordability. This could involve starting in the more Eastern parts of the Fraser Valley, such as as Chilliwack, Abbotsford, Mission or Langley. As equity builds up over time, perhaps a homeowner can climb the location property ladder and move more westward towards places like Surrey, Delta, Coquitlam, Burnaby etc. until they get close enough to Vancouver itself. 

FINAL THOUGHTS

A property ladder could involve climbing rungs relating to location and/or property type. It's important to note that climbing the property ladder can vary significantly based on individual circumstances, market conditions, and regional factors. It requires careful financial planning, research, and a long-term perspective. Additionally, the real estate market can experience fluctuations, so it's important to consider potential risks and consult with professionals such as real estate agents, financial advisors, and mortgage lenders to make informed decisions.

But overall, home buyers in Metro Vancouver can have some optimism that they can likely afford to get started somewhere in the housing market. The Fraser Valley markets of Surrey, Langley, Abbotsford, Mission and Sardis are great housing markets to get started in.

Over time, real estate does tend to appreciate and wealth can be built-up to be reinvested.