See what first-time buyers expect to pay for their first home Image

See what first-time buyers expect to pay for their first home

By Newinhomes on Apr 26, 2019

As home prices continue to rise in Ontario, first-time buyers are getting slightly less optimistic and are seeking out larger financial gifts from friends and family, according to recent survey results. 

The Bank of Montreal released the results of its First-Time Home Buyers Survey, revealing the intentions and expectations of Canadian first-time buyers. 

In Ontario, first-time buyers expect to pay an average price of $443,705. To put this into perspective, the average price of a condo in the Greater Toronto Area in the first quarter of 2019 was $557,377, according to the Toronto Real Estate Board. And according to the Building Industry and Land Development Association, a new condo in the GTA averaged more than $780,000 in March 2019.  

That said, it’s important to remember that these are just averages, which means there are higher priced units and lower priced units available across the GTA. So, we think the mid $400,000s is still realistic for first-time buyers in the GTA. 

Only 32% of first-time buyers in Ontario believe their housing markets are affordable. Of course, it would be better if this number was higher, but 32% is actually higher than we would have guessed. 

Think Ontario is too expensive? BMO says Calgary, Edmonton, Saskatoon, Regina, Vancouver, and Victoria are buyer’s markets. We can see the first four being realistic buyer’s markets for first-time buyers, but Vancouver and Victoria? Those are the only places in Canada more expensive than Toronto. 

"While not every Canadian sees the market as affordable, it's clear that home ownership is still the goal," says Hassan Pirnia, Head, Personal Lending and Home Financing Products, BMO Bank of Montreal. "We generally expect that Canadians will get a bit of reprieve from rising rates, so the market for first-time buyers is more favourable."

One quarter of first-time buyers are looking for a financial gift from friends or family between $5,000 and $50,000. When looking at just millennial first-time buyers, they are looking for an average gift of $61,431. More than 10% of first-time buyers are hoping for a financial gift of $100,000 or more! 

"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," says Pirnia. "It comes down to ensuring that the homebuyer can sustain the costs of homeownership on their own. What can help is coming in to speak with a mortgage specialist – they will assist new homebuyers navigate through the various home financing options and, together, come up with a plan that fits their financial situation."

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