According to a new report published by Royal LePage, a quarter of first-time homebuyers in Canada are relying on financial assistance from sources outside of their immediate families to make their mortgage payments. This trend is attributed to rising home prices and higher interest rates, which make it increasingly difficult for young Canadians to afford their first homes without assistance. The report, conducted in collaboration with mortgage insurer Sagen, surveyed over 2,200 Canadians aged 25-45 between February and March of this year.
Among recent first-time buyers, 35 percent stated that they received a lump-sum payment from their parents or relatives to help with their home purchase. In Vancouver, 41 percent of buyers surveyed claimed to have received such assistance, while in Toronto, the figure was 36 percent. Additionally, one in four respondents reported receiving financial help with their monthly mortgage payments. In Calgary, 34 percent of first-time buyers said they received assistance with their mortgage payments.
Of those who received financial aid, almost half stated that it was given as a gift, while 37 percent considered it a loan that they would repay.
Royal LePage CEO Phil Soper commented that the demand for housing is surpassing supply, leading to increased home prices and creating barriers for first-time buyers. The higher interest rates implemented by the Bank of Canada to cool down the housing market further exacerbate the situation. The report indicates that these high interest rates are causing some buyers to adjust their home-buying plans. About 34 percent of first-time buyers said they purchased a home in a more affordable neighborhood or region than initially planned, while 32 percent bought a smaller home.
The report also highlights that first-time buyers in Montreal are more likely to opt for a more affordable neighborhood, while Calgarians are more inclined to downsize their homes amid unfavorable economic conditions.
Furthermore, the survey reveals that the time needed to save for a larger down payment is delaying first home purchases for many buyers. The 2023 survey found that 24 percent of first-time buyers were under the age of 30, 33 percent were aged 30-34, and 43 percent were older than 34. In contrast, the 2021 survey showed that 29 percent of first-time buyers were under 30, 38 percent were between 30 and 34, and 33 percent were older than 34.
Soper attributed the delayed entry into the housing market to the increasing cost of borrowing and the unprecedented surge in home prices during the pandemic. He emphasized that the issue of unaffordable housing in Canada cannot be ignored.
For more information on navigating Canada’s housing market, Global News’ Home School series provides useful insights.
Copyright 2023 Global News, a division of Corus Entertainment Inc.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
