Financial Struggles and Compromises First Time Homebuyers in Canada Rely on Outside Help Adjusting Expectations
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A report published by Royal LePage reveals that a significant portion of first-time homebuyers in Canada are relying on external financial assistance to afford mortgage payments. The study, conducted in collaboration with private mortgage insurer Sagen, surveyed over 2,200 Canadians aged 25-45 who either purchased a home since 2021 or planned to do so in the next two years. The findings indicate that 35 percent of respondents who bought their first home within the past two years received a lump-sum payment from their relatives, while 25 percent have received financial help for their monthly mortgage payments. In cities like Vancouver and Toronto, 41 percent and 36 percent of buyers, respectively, received contributions to aid their purchases.
The report highlights the challenges faced by young Canadians in affording their first homes due to surging home prices and rising interest rates, exacerbated by limited housing supply. Higher interest rates imposed by the Bank of Canada as a measure to cool down the heated housing market during the pandemic have led to compromises among first-time buyers. Approximately 34 percent of respondents stated that they purchased homes in more affordable neighborhoods or regions than initially planned, and 32 percent bought smaller homes. Moreover, the survey reveals that the average age of first-time homebuyers is increasing, with 24 percent under the age of 30, 33 percent aged 30-34, and 43 percent over the age of 34. This delay is attributed to the need to save for larger down payments.
Read the full article on: Global News
