Is homeownership becoming a luxury in Canada?

• Rising housing costs in Canada make homeownership increasingly difficult for new generations, often requiring family financial support for down payments
• Real estate broker Alex Hood notes that even well-paid first-time buyers struggle to save as housing prices outpace their savings ability
• Some families invest in properties for future use by their children, adding competition and driving prices higher
• Hood advises buyers without family support to explore government programs, consider co-buying, and invest in more affordable markets outside Toronto

As housing costs and the cost of living continue to rise, each new generation in Canada is finding it tougher to achieve home ownership. Many rely on family financial support to reach down payments, and if the trend continues, parents might not be able to help the next generation at all.

"Over time, buying a home could become a luxury, even more out of reach than it is today, making the dream of homeownership less accessible for most people," says Alex Hood, a real estate broker at Strata Real Estate Brokerage in Toronto.

Challenges for first-time buyers: Hood sees this trend primarily among first-time buyers in their late-20s to mid-30s. Despite holding well-paying jobs, many struggle to save for down payments as housing prices outpace their ability to save.

In Toronto, entry-level condos and homes priced between $600,000 and $900,000 often see younger buyers relying on family money to make a purchase. "It's also common in higher-end markets, where wealthy families are often helping their kids buy luxury properties," Hood explains.

Investor dynamics: Some families are taking a long-term approach by purchasing condos or duplexes as investments for their children to occupy in the future. While this can be a smart way to build wealth, it also adds competition for buyers going it alone, and pushes prices even higher.

AH's advice for buyers without family support: Hood offers practical tips for prospective homeowners who lack financial backing from family:

• Explore government programs, such as first-time buyer incentives.
• Consider co-buying with friends or family members.
• Save longer and focus on starter homes or neighborhoods with lower price points.
• Invest in more affordable markets outside Toronto to build equity and eventually buy closer to the city.

AH on competition fluctuations: "Right now, the playing field is more even since there’s less competition in the market. This gives buyers without family help a better shot at getting in, even with smaller down payments" Hood notes. However, he cautions that in hotter markets, these buyers still struggle to compete against those with stronger financial backing.