For Keira Azzopardi and her fiancé, Stephen Monus, the experience of house hunting in Toronto has been a mixed bag of hope, excitement and stress.

The couple, both in their early 30s, have been looking since last summer. They have put in offers on five houses but were outbid each time, sometimes to the tune of $200,000 to $350,000 over asking.

“Even though we’ve been looking at places for a long time and are aware that some of the neighbourhoods we look at come with a bit of a premium, sometimes we still get blown away by what the house ends up selling for,” said Azzopardi. “Even our realtor has been shocked in a few instances.”

This spring, amid a real estate market that is seeing dropping prices, slowing sales and more choice with properties sitting on the market longer in many parts of the country, it would seem that first-time buyers have their best chance in years to step onto the first rung of the property ladder.

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But even with the introduction of the First Home Savings Account and the First-time home buyers’ GST/HST rebate on new homes valued up to $1 million, a higher Home Buyers’ Plan withdrawal limit and provincial incentives, realtors and brokers across Canada describe the mood among first-time buyers such as Azzopardi and Monus as cautious.

“I find that buyers are more hesitant to compete than they were,” said Tanya Colbo, a real estate agent at Royal LePage Atlantic in Halifax. “I think they’ve been hearing these stories about 2021 and competing like crazy. Some people felt like they overpaid for homes, and then the people who want to sell now are stuck because the market has settled a bit.”

Still, slowing sales and cooling prices have created an environment where first-time buyers have more leverage in negotiations and conditions such as home inspections.

“It really makes a huge difference because they get a chance to take a look at what’s on the market and have time to think and do their due diligence, which for a very long time didn’t exist in our marketplace,” said Rhiannon Foster, a Vancouver-based realtor at Century 21 In Town Realty.

Home prices are just one component of the high cost of living weighing on many Canadians, said Kori Marin, co-founder and broker at Fox Marin Associates in Toronto.

“I don’t think it just comes down to housing anymore. I think it comes down to your entire life circumstances,” said Marin. “Going to the grocery store is insane. Going out for dinner is astronomical. Every time you pay for something, (such as) property taxes, land transfer taxes, you’re just getting dinged left, right and centre.”

A combination of changing priorities and being priced out of the market means the profile of first-time buyers is skewing older, said Ralph Fox, co-founder and broker of record at Fox Marin. He said there has been a “great reckoning” of people looking for more flexibility in their lifestyles questioning the traditional path of being anchored to a mortgage at a young age.

“We’re seeing a lot of people with very strong incomes, young people earning $200,000 or $300,000 a year, electing to rent,” said Fox. “That’s something we typically wouldn’t have seen a few years ago, and it’s something that’s becoming more part of the conversation that never really existed up until this recent downturn.”

Many real estate professionals said saving up a down payment is the biggest hurdle for first-time homebuyers. Financial support from the so-called “Bank of Mom and Dad” is more prevalent than ever, particularly in expensive markets.

“I don’t think that’s going away,” said realtor Steve Saretsky, owner of The Saretsky Group in Vancouver. He estimates about 90 per cent of the buyers he works with have financial support. “Even if prices correct 10 per cent or 15 per cent from here, which would be about 30 per cent below the peak, I still think you’re looking at the inability to save the down payment as the biggest challenge.”

REAL ESTATE TIMES

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