For years, first-time buyers across Canada have felt completely locked out of the housing market. Prices were climbing out of reach, interest rates shot up, and bidding wars made it almost impossible to compete.
But things look a little different in 2025. According to the Canadian Real Estate Association (CREA), the average Canadian home price has dropped by about $150,000 since February 2022. At the same time, the Bank of Canada’s rate has eased back to 2.75%, down from the 5% highs we saw in 2023.
So the big question is: is this the window first-time buyers have been waiting for?
Why Buyers Finally Have Some Leverage
Real estate agents in Toronto, Vancouver, and other large cities say they’re seeing more first-timers step back into the market. Here’s why:
- Inventory is higher: More homes and condos are available, and there’s less competition for each one.
- No more rushing: Buyers don’t feel the same “buy it now or lose it forever” pressure.
- More value for money: A couple of years ago, $600,000 barely bought a tiny condo in Toronto. Today, it can stretch to a decent one-bedroom. Move just an hour outside the city and that same budget could get you a three-bedroom house.
Don’t Feel Rushed — It’s Not “Now or Never”
Some people worry that if they don’t buy right away, they’ll miss the bottom. But experts caution against panic buying.
Fred Blondeau, managing director at Green Street, puts it plainly: we’re not going back to the runaway price growth of the last decade any time soon. That means buyers actually have time to compare, think, and buy smart.
Still, history tells us that waiting too long can backfire. Buyers who jumped in during the uncertain 2008 downturn saw huge gains when they sold five to seven years later. The lesson? You’ll rarely know where the exact bottom is — and sometimes waiting means missing the opportunity.
Why Prices Could Rise Again
The market may be cooler now, but some factors could push prices back up:
- Pent-up demand: According to RBC economist Robert Hogue, the trade dispute with the U.S. earlier this year caused buyers to pause. As that uncertainty fades, activity is already starting to pick up in Ontario and B.C.
- Construction slowdown: New builds in B.C. and Ontario have slumped. If supply stays low and demand rises, prices could climb again.
- Rates remain a wildcard: Interest rates are friendlier now, but the Bank of Canada could adjust quickly depending on the economy.
Risks First-Time Buyers Should Watch
It’s not all opportunity. There are caution signs too:
- Job market strain: Households are under financial stress, and unemployment is a concern.
- Mortgage delinquencies are rising: In Ontario, late payments have nearly tripled since 2022. Many owners who locked in super-low rates will be renewing at higher rates this year, which could force more sales.
- Extra costs matter: Beyond the mortgage, buyers need to budget for property taxes, insurance, and (for condos) monthly fees — none of which are going down.
Regional Differences Across Canada
Canada isn’t one market — it’s many.
- B.C. & Ontario: Softer prices, higher supply, and better negotiating power. Great time to shop, especially for condos.
- Saskatchewan & Winnipeg: Tighter markets where listings are scarce. Agents report bidding wars in places like Saskatoon and Regina.
- Quebec & Atlantic Canada: Demand is strong, prices are climbing, and activity hasn’t slowed much.
Can You Actually Afford That $600K Home?
Toronto mortgage broker Marshall Tully explains it this way: even with 20% down ($120K) on a $600,000 home, you’d need about $100,000 in annual household income to qualify. Most lenders will approve mortgages at roughly 4× your income under current rates.
And don’t forget the other costs:
- Property taxes
- Insurance
- Maintenance or condo fees
These “extras” can add hundreds of dollars to your monthly payment and are often overlooked by first-time buyers.
Condos: Opportunity and Risk
The condo market is a mixed bag. There are resale units at attractive prices, but many buyers who purchased pre-construction units as investments are struggling to find takers. Lower prices can attract demand, but only if the size, fees, and location actually match buyers’ needs.
The Takeaway for 2025
For the first time in years, first-time buyers in B.C. and Ontario finally have a shot at ownership. Prices are down, interest rates have eased, and there’s more room to negotiate.
But don’t mistake this for a “now or never” moment. The smart move is to:
- Get pre-approved,
- Understand your real monthly budget,
- Watch your local market closely,
- And be ready to act when the right home shows up.
As always, if you’re considering buying or selling a home in Abbotsford, feel free to reach out. We are here to help navigate these new mortgage rules and ensure you make informed decisions that suit your financial goals.