The average cost of a home in Vancouver is $1.5 million. Toronto’s average home price is $1.2 million. While these cities offer a majority of the job opportunities in Canada, these home prices are far beyond what most Canadians’ salaries could buy.
A significant factor in this affordability issue is student loan debt. If potential homeowners weren’t saddled with this burden, they would have a lot more funds for down payments and mortgage installments.
But, according to National Observer reports, the average student loan debt among Canadians is $26,819. While working hard to pay off this debt, it can be challenging to break into the real estate market.
As a result, rates of homeownership for those under age thirty has been dropping, while student debt continues to rise. Many Millennials are looking at celebrating their fortieth birthdays as renters who are still shouldering mounds of student loan debt. Making their large monthly debt payment on top of a mortgage payment would be too much.
Fortunately, all hope is not lost for first-time home buyers. One possibility is the First-Time Home Buyer Tax Credit, which was introduced by the Canadian government in 2009. If your home qualifies, you could enjoy a $5,000 income tax credit and $750 in tax relief under this program.
The Home Buyers’ Plan is another option, which allows buyers to draw on their registered retirement savings plans (RRSPs) to buy or build a home.
If you’d like to make a move from renting to owning, feel free to contact me for additional first-time buyer resources and personal assistance with your home search.