Here's what a starter home looks like on P.E.I. — and why it's so hard to get one

It took Samantha Branstrom and her partner three years to break into the P.E.I. real estate market. 

And they consider themselves among the lucky ones. 

"I would say it's 100 per cent being in the right place at the right time," said Branstrom. 

She and her boyfriend both have full-time jobs and looked at about a dozen houses before buying their first — a home in Brackley, about nine kilometres north of Charlottetown, for $315,000. 

According to the P.E.I. Real Estate Association, that's roughly the average price first-time buyers on P.E.I. can expect to pay these days. 

Association president James Marjerrison said starter homes on the Island in 2023 generally range from $300,000 to $350,000. 

"Certainly, if you get something for under 300, that's even better, but most first-time homebuyers are budgeting within that range," he said. 

P.E.I. real estate agent Thamara Paparoni said what's considered a starter home has "changed drastically" in the eight years she's been in the business. When she started in 2015, she said her clients were looking for properties under $200,000 — and at the time, there were plenty in that range. 

In today's market? Think again.

"Right now if you're looking for $200,000, unfortunately you're not going to find very much," said Paparoni. 

House prices rising faster than wages  

So what kind of money do you need to buy a starter home on P.E.I. right now?

Mortgage broker Christine Milley said if you want to get approved for a $350,000 mortgage, you will probably have to make a household income of about $90,000 before taxes — assuming you don't have significant debt. 

Here's the problem: Many households on P.E.I. make much less than that $90,000. The price of housing has greatly outpaced the average household income. 

According to the P.E.I. Real Estate Association, the benchmark house price on P.E.I. in 2013 was $150,025 — rising to $298,600 by 2021. In contrast, Statistics Canada said the median household income on the Island rose from $64,400 to $72,000 during that time.

Put simply, incomes on P.E.I. rose by 11.9 per cent over that time span, while the cost of housing rose by 99 per cent. 

Milley said that's created a big challenge for people trying to buy their first home. 

"The income has not increased [along] with the cost of housing and it's created a huge affordability crisis here in line with the fact that, you know, rents are still just as expensive as the mortgage payment," she said. 

"So I get extremely frustrated when I have to tell people, 'Sorry, you know, you can't afford this $1,500 a month mortgage payment, but you can continue paying $1,800 a month in rent.'"

Milley said first-time buyers are facing even more of a disadvantage right now because they often can't pay more than five per cent of the purchase price as the down payment, so lenders won't give them the option to pay off their mortgage over 30 years instead of 25.  

"Personally, I feel very strongly that they need to be making some changes to help first-time homebuyers," she said. 

There are federal and provincial incentives, including the down payment assistance program to help first-time buyers, but Branstrom says her story is proof those don't work for everyone. She works for the federal government and her boyfriend works in tech. 

"We didn't qualify for those incentives. But that's kind of the funny part... you have to make enough money to afford a house, but if you make too much money, then you can't afford the incentives that the government has for people to buy a house," she said. 

Not your grandfather's bungalow 

When you think of a starter home, a bungalow with dormers and a white picket fence might come to mind. But some agents on the Island said a starter home these days might not fit that image. 

Steve Yoston, who's been a real estate agent on P.E.I. since the early 2000s, said while many buyers still opt for the traditional detached house, others are looking for a more affordable alternative. 

• Get the news you need without restrictions. Download our free CBC News App. 

"There's a lot more condos or apartments being turned into condos.... We're selling more semi-detached than we used to years ago," he said. 

"The landscape has changed considerably in over 20 years for sure."

Another change Yoston has noticed: the people buying these starter homes. He said it's harder now for single people with one income to afford their own home, so more clients are buying along with another person. 

"And that's not necessarily what we would consider a traditional relationship, right? It might be two friends, or it might be parent-child." 

For buyers like Christian Clow, the current state of P.E.I.'s housing market made him think hard about what he wanted in a home versus what he could afford. 

Clow, 27, works for the Canada Revenue Agency. About a year and a half into his search, he had to switch gears. 

"I was only looking in the Charlottetown area and [I] realized that probably wasn't going to be a reality," he said.

He started looking west and ended up buying a mini home at a trailer park in Summerside for $160,000 through an estate sale. 

When asked to describe what it's like navigating the P.E.I. market as a first-time buyer, he responded with one word: "hectic." 

Breaking into the market

So, how does one become a first-time buyer? And is it worth it?

Marjerrison said buying your first home is a big investment, but an important one that can set you up to afford a more expensive home in the future. He said buying a home in your 30s or earlier is ideal. 

"I think it's important at that age to get into the market. I mean, that's your equity-building years," he said, adding that those are prime earning years as well. 

"Later on in life, a lot of people use their home to kind of supplement their retirement. Not everybody has pensions and that sort of thing."

While it's worth getting your foot in the door, Paparoni said there are lots of things to consider before trying to buy, like getting a home inspection to catch any red flags. 

"How much is the new roof? How much is putting on your windows? Then take a look at the foundation, see if it's dry in the basement," she said. 

"I always tell my clients that it's better to wait for the right house instead of feeling that desperation, because that's when you make bad decisions."

She also recommends that people get pre-qualified with a lender before they start looking at homes.