By Ketki Saxena
Investing.com -- A recent Royal LePage survey revealed increasing concerns among potential first-time homebuyers regarding their ability to afford a sufficient down payment. Of those planning to purchase their first home within the next two years, 63% expressed worry about missing out due to inadequate funds for a down payment, marking an increase from 60% in 2021.
In some of Canada's most densely populated and desirable regions, these affordability concerns were even more pronounced. In the Greater Toronto area, 74% reported such worries; while this figure was at 71% for the Greater Vancouver area and at 67% for the Greater Montreal region.
The most striking surge in apprehension over housing affordability occurred in Calgary, where 69% of survey respondents indicated fears about entering the housing market – up significantly from just 42% last year.
Finding Financial Assistance Amidst Mounting Concerns
The majority of first-time homebuyers sought some form of financial aid to help them enter into the real estate market. Among respondents,
- 25% received assistance with monthly mortgage payments,
- 35% obtained a lump sum towards their down payments,
- 10 % had parents or relatives co-signing on their mortgages.
In total, however, it should be noted that nearly four out of ten (39%) respondents did not receive any financial assistance when purchasing their first home.
For those who did secure help, the nature of this support varied. Nearly half (46%) indicated that the funds were gifted to them, while 37% reported receiving a loan that would need to be paid back eventually.
No End in SIght To The Struggle for First-Time Buyers
"That first transaction is the most difficult, and in today’s environment, first-time buyers are faced with large price tags, high carrying costs and the added challenge of qualifying for lending at higher rates due to the stress test," Phil Soper, president and CEO of Royal LePage.
“With demand continuing to outpace new supply and renewed upward pressure on home prices, securing a reasonable down payment will remain a significant obstacle for first-time buyers in Canada"