Industry executives say new buyers have a stronger purchasing outlook than in recent years – but in pricier cities, gifted downpayments remain a big part of the market
Policy shifts, more stable rates, and a calmer bidding environment over the past three years have helped first-time homebuyers re-emerge as a prominent force in Canada’s housing market.
Still, the door to homeownership remains partly closed in some of the country’s most expensive regions for hopeful buyers without family support or a second six-figure income.
That was the message from industry leaders speaking at Teranet’s latest Property Ecosystem Summit in Toronto on Tuesday (April 21), who said that while conditions have improved significantly from the peak of the rate-hike cycle, uncertainty and deep regional divides are continuing to shape the market.
Jason Mercer (pictured, top left), chief information officer at the Toronto Regional Real Estate Board (TRREB), noted the dramatic shift seen in the Greater Toronto Area (GTA) housing market over the past several years.
During the pandemic-era boom, “market conditions were super tight,” he said. “You were seeing double-digit price growth in the core of the GTA or a lot of these surrounding markets where people were literally driving until they could afford, or taking advantage of work-from-home [trends].”
But that frenzy collided with rapidly rising interest rates. At the peak of the tightening cycle, the average income required to purchase a million-dollar home in the GTA was well over $200,000, with transactions pulling back steeply because that didn’t match up with actual average household incomes.
Affordability has since improved – although it took a step back in 10 of 13 major Canadian cities in March, according to Ratehub.ca – but pent-up demand has yet to fully return. The key barrier, according to Mercer, has shifted from pure affordability to broader economic anxiety.
“We really haven’t seen a lot of that pent-up demand and trapped demand… move off the sidelines and back into the market,” he said. “We’ve seen a bit more of a shift from the affordability issue to the uncertainty issue: ‘I’m not going to move back into the marketplace even though affordability has improved quite a bit.’”
2025 ‘the year of the first-time buyer’
A good sign for the mortgage industry, though, is that TRREB polling has shown early signs of renewed first-time buyer interest recently. Those purchase intentions had remained “somewhat stagnant” in recent years, Mercer said, but appear to be improving and could continue rebounding into 2027.
Mary Putnam (pictured, top centre), senior vice president of sales and marketing at Canada Guaranty, said federal rule changes had been a big part of making 2025 “the year of the first-time buyer.”
Mortgage professionals were surprised – pleasantly so – by Ottawa’s 2024 decision to increase the insured purchase price ceiling from $1 million to $1.5 million and allow 30-year amortizations for first-time buyers, moves that Putnam said have fundamentally altered the landscape.
“Those two things made a big shift in behaviour,” she said. Headlines often focus on a still-sluggish market, but “the high-ratio market, our first-time homebuyer market, continued to increase.”
A calmer buying environment compared with frenzied bidding wars in 2021, Putnam said, was crucial in helping brighten the outlook for new buyers. “It allowed first-time homebuyers to make a thoughtful purchase and not have to panic and get squeezed out by somebody who waived conditions,” she said. “All of those things combined really supported our business.”
A question of location
For buyers, and mortgage brokers on the ground, the picture can look very different depending on where in the country they’re located.
Dustan Woodhouse (pictured, top right) of Be The Better Broker said the market in places like Edmonton and Winnipeg looked like a throwback to the early 2010s – “roses and rainbows” – while in Vancouver and Toronto, “normal people don’t buy real estate anymore.”
Homeownership in the country’s two biggest markets now depends largely on either a high-earning couple, he said, or substantial help from family. Average family gifts to first-time buyers stand at about $75,000 in Alberta, $108,000 in Ontario, and $214,000 in British Columbia.
That can mean a frustrating picture for brokers and their clients. “In the GTA and the GVA [Greater Vancouver Area], that’s become very compromised,” he said of brokers’ role in helping new buyers. “It’s very, very difficult. You’re saying no to many people who come through the door now, even with prices falling as they have.”
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