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Today’s homebuyers in Canada face significant challenges, including high interest rates, strict lending rules, and growing debt levels, all of which make homeownership increasingly difficult for younger generations. Over the past 30 years, home prices in major Canadian cities have grown at a compound annual rate of roughly 5–6%, with total increases of 436% in the Greater Toronto Area and around 460% in Halifax. It’s noted that real estate follows cyclical patterns of recovery and contraction, offering reassurance that current market struggles are likely temporary.

Although inventory levels are rising in some regions, affordability remains a pressing issue. Wages have not kept pace with escalating prices, while high down payments and mortgage stress-test requirements continue to limit access for first-time buyers. Supply shortages are especially severe in lower-priced housing segments, where demand is highest. Additionally, first-time buyers are increasingly competing with retirees and downsizers seeking smaller properties, adding pressure to an already tight entry-level market.

To improve affordability, several policy measures are suggested, including higher RRSP and TFSA withdrawal limits for first-time buyers, easing stress-test requirements, extending amortization periods, eliminating land-transfer taxes on lower-value homes, and reducing GST/HST on new builds. Accelerating construction approvals and encouraging modular housing could also help alleviate supply constraints. While regional differences exist — such as Vancouver’s condo supply challenges, Edmonton’s relative affordability, and Halifax’s sharp price increases — affordability and limited supply remain national issues. It is concluded that those who buy during this downturn may find it a favorable long-term opportunity.

Read the full article on: REAL ESTATE MAGAZINE