Lower rates boost affordability, but clients are delaying purchases
Falling interest rates, more listings, and flat home prices are making ownership more accessible in many Canadian cities. But that doesn’t mean first time buyers are in a rush to buy.
In fact, most are planning to wait another 12 to 24 months before committing, according to a new Royal LePage survey, released today (9/25).
Advisors are likely to find that clients are cautious, but that they’re also actively saving, weighing financing options, and looking for guidance with 13% respondents working toward their first home purchase within two years but currently in research mode.
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“Interest rates are trending lower and prices have stabilized or even softened in some markets, creating favourable conditions for long-awaited entry into home ownership, especially in costly cities like Toronto and Vancouver. Yet, hesitation remains,” says Phil Soper, president and CEO, Royal LePage. “For some, ongoing economic uncertainty, particularly surrounding trade relations with the United States, is prompting them to hold off until there are signs of stability.”
That hesitation also stems from economic uncertainty and the prospect of further Bank of Canada rate cuts.
Then there’s the necessary participation of intergenerational support which likely adds another layer to the decision-making process, potentially with more experienced homebuyers wanting to hold back until conditions are more favourable.
The survey highlights that 41% of first-time buyers will receive financial assistance from family or friends, while 51% will not. Support ranges from outright gifts to co-signed mortgages.
“Despite improving affordability, many first-time buyers continue to rely on family financial support,” says Soper. “This transfer of wealth has become increasingly common, as parents look to give their children the same opportunity for stability and long-term financial growth that they themselves experienced through home ownership. For some buyers, financial contributions from family can make the decisive difference between becoming a homeowner and remaining a tenant.”
Of course, not every first-time buyer has the support of a third party for their homebuying aspirations and may be more likely to delay other major financial milestones such as marriage or starting a family in order to save more to buy a home.
More than half of new buyers (53%) are targeting 20% down to avoid mortgage insurance, but 39% plan smaller down payments, triggering mandatory coverage. Notably, CMHC reported a 28% increase in insured mortgages year-over-year in Q2 2025.
“The growing number of buyers opting for mortgage insurance suggests that many are willing to accept the added monthly cost in order to get on the property ladder sooner,” Soper says. “This trend underscores the need for broader, more innovative financial tools and solutions to help Canadians renters to become owners.”
Nearly half (49%) of first-time buyers still aim for a detached home, even though price points remain steep at $870,200 nationally in Q2 2025 versus $592,000 for condos.
