It’s tougher for Coquitlam renters to scrape together enough money to buy even a starter home compared to Calgary.
That’s the conclusion to be drawn from a Point2Point survey of affordability of starter homes for Canadian renters.
But for many, that’s not likely to be a surprise.
Calgary, at 1.3 million is a much larger city than Coquitlam with a population of 140,000. And the Alberta city has room room to grow while Coquitlam is hemmed in by mountains and a river.
Still, it’s interesting to see how conditions vary from town to town and, for some renters, moving to Calgary may be an option.
Fewer starter homes
Point2Point, a real estate company that also has rentals on its website, looked at housing costs and renters’ incomes across 50 Canadian cities and found some cities were relatively affordable — but many were not.
For example, Abbotsford, Kelowna, Surrey are among the cities with the highest share of starter homes in their real estate markets, at 10 per cent. In Langley, about 14 per cent are “starter homes.”
Homes are considered “starter homes” if their price is about half the city’s benchmark price, which is calculated adding up the total dollar sales volume and then dividing the number by the total amount of sales.
In Calgary, a starter home would cost $275,400, using Point2Point’s definition, and 15 per cent of homes are starter homes in that city.
Coquitlam has just five per cent of homes in the “starter” range, which according to Point2Point is a home costing $538,950.
Income is another important factor, Point2Point noted, and in some cities renter households have higher incomes.
Incomes don’t match
Point2Point considered that the monthly mortgage should not represent more than 30 per cent of a renter household income, assuming a 20 per cent down payment was already covered and the loan was made based on a 5.75 per cent, 25-year fixed-rate mortgage.
Property taxes and insurance costs were also factored in.
Coquitlam renters would therefore need a household income of $117,435 to purchase a $538,950 starter home.
But incomes according to StatsCanada are $73,791, leaving them 37 per cent short.
Calgary renters have more hope of purchasing a starter home, according to Point2Point.
In Calgary, a starter home would cost just $275,400 and the required income to purchase the home would be $68,795. Meanwhile, the average household renter income in Calgary is $65,339, just $3,456 or five per cent shy of what’s needed.
While the numbers suggest purchasing a starter home is no picnic in Calgary, with annual incomes still short of what’s needed to purchase a home, Coquitlam renters face a steeper challenge.
However, Coquitlam is not the worst for affordability.
Among the most costly cities, according to Point2Point are Richmond and Vancouver where renter household incomes are between 42 per cent and 49 per cent shy of what’s needed to own a starter home.
For many buyers, what’s important, however, is what you get for your money:
Here are sample "starter homes" in Coquitlam and Calgary closest to the Point2Point price point:
Starter home in Coquitlam
- Coquitlam one-bedroom apartment condo: $539,800
- Address: 606-2975 Atlantic Ave.
- Size: 1 bedroom, 1 bath - 603 sq. ft.
- Age: Built in 2014, nine years old
- Features: chef´s kitchen, spa-like bathroom, south-facing, views, pool, hot tub, gym, putting green close to SkyTrain, shopping
Starter home in Calgary
- Calgary one-bedroom, one bathroom condominium: $299,999
- Address: East Hills Crossing Condominiums 1880 84 St SE
- Size: Square footage not disclosed
- Age: New
- Features: Close new pedestrian pathway and Easthill Shopping Centre and to a future BRT station (BRT is a fast, reliable bus service achieved through infrastructure improvements such as dedicated bus lanes and transit priority at traffic signals).
While renting is becoming more common with new purpose-built rental housing under construction or being planned in Coquitlam, the challenge for many wishing to own their own home will continue to be price vs income.
Even Calgary residents have to consider what they will get for their hard-earned dollar.
