Against a background of speculation that we may see a fourth rate cut from the Bank of Canada, a new survey suggests young Canadians have rediscovered their desire to buy their own home.
And that’s great news for the entire market!
Interest rates are currently at 3.25%, and retail banks are bending over backwards to attract new customers. With our latest headline inflation number at 1.8% – below the central bank’s target range – we could see money becoming even cheaper.
Also, first-time homebuyers or those purchasing a newly-built home can have a 30-year mortgage, rather than one that must be paid back within 25 years.
This is going to have an awesome impact on the market.
Consequently, young Canadians are changing their view of the property market with more than half now believing property ownership is achievable.
The survey found 84% believed property was a worthwhile investment and three-quarters (75%) said property ownership remained a lifetime priority.
A quarter of respondents remain stuck in the belief ownership is beyond their reach.
For sure, the drop in mortgage costs hasn’t magically made the market accessible for every young Canadian. Prices have remained stubbornly high even as rates topped 5% during 2023-2024.
The Canadian Real Estate Association (CREA) believes we’re going to enjoy a vibrant housing market in 2025, but it says we’re not going to see interest rates drop to the near-zero levels of the Covid era.
Polling by the PR company, Hill & Knowlton, also found 45% of young Canadians were now saving for a deposit and 42% were paying off debt to improve their credit score.
Thinking strategically, almost a third (31%) believed they would build careers that would give them a salary to break into the housing market.
If you’re a first homebuyer, or wondering how to own your home, here are some savings tips from our agents. We hope you find them useful:
Embrace Your Budget: This is the foundation of saving. Track your income and expenses meticulously. Apps like Mint or YNAB can be super helpful. The goal is to maximise the amount you can consistently put towards your downpayment.
Automate Savings: Set up automatic transfers to a dedicated savings account each payday. Even small amounts add up over time. And automation removes the willpower equation.
Special Interest: Consider a high-interest savings account to make your money work harder.
Utilise Tax-Advantaged Accounts: Canada has some great programs to help first-time home buyers. They include the First Home Savings Account (FHSA) and the Registered Retirement Savings Plan. You can withdraw up to $35,000 from your RRSP under the Home Buyers’ Plan (HBP) for a down payment. You then have 15 years to repay the amount back into your RRSP.
Increase Your Income: Consider a side hustle, freelance work, or asking for a raise at your current job. Every extra dollar you earn can accelerate your savings journey.
Expired Program: Unfortunately, the government has scrapped the popular First-Time Home Buyer Incentive, which offered shared equity mortgages to help with your down payment.