As housing affordability continues to worsen in B.C., the down payment needed to buy a home has only increased.
Metro Vancouver, the Fraser Valley and Victoria are among the four Canadian cities with the largest increases in the minimum down payment needed to purchase a single-family home between July 2018 and July 2023, with Toronto being the fourth, according to an Aug. 25 report by online brokerage Zoocasa.
While Metro Vancouver doesn’t have the largest increase in down payment in the last five years, it has the most expensive minimum down payment of all Canadian cities at $402,980.
This is nearly $100,000 higher than the next most expensive area, the Fraser Valley. Between July 2018 and July 2023, Metro Vancouver’s minimum down payment increased by $81,640.
The minimum down payment needed in the Fraser Valley increased by $102,540 to $307,580, with Victoria’s increasing to $235,680 — a $180,190 jump.
Toronto had the largest increase in Canada with the minimum down payment required for a single-family home going up by $212,660 to $277,780 in the last five years.
Out of the 20 cities analyzed in the report, the Fraser Valley, Victoria and Toronto were the only cities with more than a $100,000 increase in minimum down payment over the past five years.
Any prospective home buyer in these three cities needs to consider if they have enough money set aside to meet those growing down payments and the mortgages that come with them, said Patti Cosgarea, a spokesperson for Zoocasa.
“Vancouver is the fourth least expensive for down payments and Winnipeg is a fourth most affordable for down payments,” said Cosgarea.
“If you juxtapose this, you'll see that in Winnipeg, down payments have increased by over $4,000 versus over $81,000 in Vancouver. So, it's really interesting to see the contrast across the country.”
Edmonton is the Canadian city with the lowest increase in minimum down payment in the last five years with a change of $1,405 to $21,260, according to Zoocasa.
The Fraser Valley has been seeing more attention as buyers move further away from Vancouver in search of more affordable prices, according to Cosgarea. As people leave the expensive urban cores, she equated the activity in the Fraser Valley as similar to that seen in the Greater Toronto Area (GTA).
“I do absolutely think that the Fraser Valley is going to continue to be more and more competitive. Vancouver prices continue to grow, so the trends will follow what we've seen in Toronto and the GTA as well,” she said.