Canada’s real estate market is primed for buyers, but first-timers are moving at their own pace

Highlights:

• 13% of Canadian adults are working towards their first residential property purchase within the next two years; a majority of them plan to buy in the next 12 to 24 months. Congratulations to our good friend Sam, a retiree closing on her first home on October 18th! 
• More than half (53%) of first-time buyers plan to put at least 20% down on their purchase; while 39% will not and will therefore need to buy mortgage insurance.
• 41% of first-time buyers say they will receive financial assistance from family or friends, while 51% will not.
• Single-family detached properties remain the most popular housing type among first-time buyers.
• Finding a home that is move-in ready is the most important non-price related factor for first-time buyers, according to Royal LePage® professionals across the country.
• Declining interest rates, higher inventory levels and softening home prices in major cities are opening new doors for first-time buyers in 2025. Still, despite more favourable market conditions, many are choosing to delay their purchase plans, intending to hold off for at least another year.

According to a recent Royal LePage survey, conducted by Burson,[1] 13% of Canadian adults say they are actively working towards the purchase of their first residential property within the next two years. Of this group, a small proportion say they are working towards their first purchase within the next 12 months, while the majority (82%) say they are planning to make a purchase in 12 to 24 months.

When asked what stage of the purchasing process they are in, more than half (51%) of first-time buyers said they are currently researching neighbourhoods where they can afford to live, 49% are actively browsing online listings, 19% are actively viewing homes listed for sale in person, and 19% have engaged with a real estate agent. Respondents were able to select more than one answer.

“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,” said 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. Buying a home is the biggest financial decision most people will ever make, and first-time buyers naturally want to do so with as much certainty as possible.

“Others are choosing to wait in hopes of securing a better deal. With the potential for further rate cuts from the Bank of Canada this year, those in no rush to purchase now are taking a methodical approach – building up their savings and deliberately planning their entry into the market when they feel the timing is best for them.”

According to a recent Royal LePage survey of real estate professionals across the country who work with first-time homebuyers,[2] 36% report an increase in first-time buyer activity so far this year, while 25% report no change. This, despite home prices holding relatively steady, a trend that would typically encourage new buyers to enter the market. According to the most recent Royal LePage Home Price Update and Market Forecast, the aggregate price of a home in Canada increased just 0.3% year over year to $826,400 in the second quarter of 2025.[3] On a quarter-over-quarter basis, the national aggregate home price decreased by 0.4%.

Financial support continues to flow from family to first-time buyers. And, as Susan Benson, Broker, points out, "this includes  includes first time property ownership (inland and waterfront) made possible due to generational wealth transfer from grandparents to parents and grandchildren."

While many buyers continue to rely on help from family to make their first home purchase, most do not. When asked if they would receive any financial assistance towards the purchase of their first residential property, more than half (51%) said they would not receive any help. Meanwhile, 41% of first-time buyers said they would. Even as affordability has improved in several markets over the past year, many first-time purchasers continue to rely on financial support to take their first step onto the property ladder.

Among first-time homebuyers who will receive financial support, 29% say it will be in a lump sum with no repayment expected, 27% will receive a loan from family or friends that they will pay back, 28% will have a family member or friend co-sign their mortgage loan, and 26% will receive financial assistance towards their monthly mortgage payments. Respondents were able to select more than one answer.

“Despite improving affordability, many first-time buyers continue to rely on family financial support. 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,” said Soper.

“However, many lack access to this kind of support, forcing them to adopt more creative and often difficult approaches to saving. Some delay major life milestones, such as marriage or starting a family, in order to prioritize home ownership. Others cut back significantly on discretionary spending, or continue living at home with parents well into adulthood to build up their savings. While determination and careful planning help these buyers reach their goals, the gap between those who receive financial assistance and those who do not highlights the deep affordability challenges in today’s market.”

In order to afford their first home, 60% of first-time buyers say they are searching for homes in a more affordable area, 40% are searching for homes that are smaller and therefore more affordable than they originally planned, 39% are cutting back on discretionary spending in order to save money, and 28% have or will use money from investments or retirement savings in order to fund their first home purchase. Respondents were able to select more than one answer.

More than half (53%) of first-time buyers plan to make a down payment of at least 20% when purchasing a home, while 39% intend to purchase with a down payment of less than 20% and obtain mortgage insurance. Under current Canadian borrowing rules, buyers who put down less than 20% of the purchase price are required to buy mortgage insurance.

Over the past year, demand for mortgage insurance has grown. In its Q2 2025 Quarterly Financial Report, the Canada Mortgage and Housing Corporation (CMHC) reported a 28 per cent year-over-year increase in the number of insured units for the period ending June 30, 2025.[4] Approximately one quarter of all outstanding mortgages in Canada are insured.

“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 with a smaller down payment, rather than risk being priced out when property values rise. For some, this strategy provides a way to begin building equity now rather than waiting years to save the full 20 per cent minimum required to avoid having to buy insurance,” added Soper. “This trend underscores the need for broader, more innovative financial tools and solutions to help Canadians renters to become owners.”

The dream of a detached home lives on.

Despite the hefty price tag, many first-time buyers continue to aspire to own a detached property as their entry into the market. Nearly half (49%) of respondents plan to purchase a single-family detached property as their first home, followed by 26% who intend to buy a condominium or apartment, according to the survey.

When asked about the typical budget range for first-time homebuyers in their market, 55% of Royal LePage professionals across Canada said it was between $500,000 and $750,000, followed by 19% who said it was between $300,000 and $500,000. In the second quarter of 2025, the national median price of a single-family detached home increased 1.1 % year over year to $870,200, while the median price of a condominium decreased 0.8 per cent to $592,000.

“The dream of a first home often collides with budget reality. While most aspire to own a detached house, affordability often dictates a more modest starting point,” said Soper. “With many employers requiring staff to return to the office, proximity to transit and other amenities has become an increasingly important factor in the search. New buyers also show a clear preference for properties in move-in ready condition, as few have the time or financial flexibility for major renovations.”

42% per cent of first-time buyers say they will prioritize the neighbourhood where they want to live, regardless of the commuting distance to their place of employment. Meanwhile, 31% say they will purchase a home based on its proximity to their workplace.

When asked what non-price related features first-time buyers typically desire in their market, 21% of Royal LePage real estate professionals reported newly renovated or homes in move-in ready condition as the top choice, followed by outdoor living space (17%) and convenient access to everyday amenities (17%). Respondents were able to select more than one answer.

2025 Canadian First Time Home Buyers Survey read on>

Source: Royal LePage, Toronto. September 25th, 2025