Four in ten first-time homebuyers say the Canadian housing market is affordable but many will need assistance.
A new survey from BMO shows growing sentiment among potential new entrants to the housing market but with household debt and interest rates challenging buyers, they will be looking for friends and family to help them out.
Hassan Pirnia, Head, Personal Lending and Home Financing Products, BMO Bank of Montreal, says that it’s important that buyers are not reliant on others for ongoing costs.
"Up against external headwinds, parents and family members are being asked to help first-time buyers enter the real estate market. While a financial gift can help, a home financing solution that fits a homebuyer's budget is equally important," he said. "It comes down to ensuring that the homebuyer can sustain the costs of homeownership on their own."
First-time buyers in Atlantic Canada expect to pay the lowest average price at $326,700, with those in Ontario and British Columbia planning to pay at least $100,000 more ($443,705 and $445,294, respectively).
To make this happen, more than one quarter of Canadians are looking for a financial gift between $5,000 and $50,000. 10% are seeking $100K or more.
On average, Millennials are looking for more help than their Generation X cohorts ($61,431 and $43,400, respectively) and are also more likely to be living rent-free with parents while saving for a down payment.
Atlantic Canada most affordable
Respondents to the poll, conducted by Pollara Strategic Insights, were most likely to say their market is affordable in Atlantic Canada (62%).
This compares to 58% in Alberta, 32% in Ontario, and 34% in British Columbia.
"While not every Canadian sees the market as affordable, it's clear that home ownership is still the goal," noted Pirnia. "We generally expect that Canadians will get a bit of reprieve from rising rates, so the market for first-time buyers is more favourable."
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