It took three years for Ross Davison and his wife to purchase their first home.

The Ottawa couple began looking before the pandemic but were repeatedly sidelined by rapidly rising house prices, climbing interest rates and tougher mortgage rules.

害羞草研究所淚t felt like a constantly changing game,害羞草研究所� Davison said. 害羞草研究所淭hings were always jumping just out of reach.害羞草研究所�

With a baby on the way last spring, the couple ended up scaling back their wish list and put a bid in on a suburban townhouse.

害羞草研究所淚ronically, we saw these units when we first started looking but we didn害羞草研究所檛 want to share a wall,害羞草研究所� he said. 害羞草研究所淲e ended up buying one three years later for double the price.害羞草研究所�

First-time homebuyers in Canada are facing the toughest real estate market in generations.

Skyrocketing home prices and massive interest rate spikes have driven affordability to its worst level in decades, according to a TD Economics report, leaving some first-time buyers shut out of the market altogether.

First-time homebuyers have traditionally accounted for more than half of all purchases. But that share has been declining since the pandemic began, reaching a low of 46.8 per cent in June 2021 as real estate investors and multiple-property owners picked up the difference, TD said.

Although house prices are beginning to edge down, overall affordability hasn害羞草研究所檛 improved.

害羞草研究所淭he drop in prices has not offset the effect of higher interest rates,害羞草研究所� said RBC economist Robert Hogue. 害羞草研究所淥ur affordability measure is still deteriorating.害羞草研究所�

Real estate experts say there害羞草研究所檚 a steeper-than-usual learning curve ahead for many first-time homebuyers. Still, they say there are tips and tricks that can help.

害羞草研究所淭he home ownership dream is not dead,害羞草研究所� Hogue said. 害羞草研究所淚 think it can still be achieved by showing flexibility on when to achieve it and what form it害羞草研究所檚 going to take.害羞草研究所�

The first call all prospective first buyers should make is to a real estate agent, said Despina Zanganas, a Toronto Realtor with PSR Brokerage.

害羞草研究所淧eople often wait too long to try and find a Realtor,害羞草研究所� she said. 害羞草研究所淚 suggest reaching out to Realtors a year before you plan to buy.害羞草研究所�

Buyers often rely on word of mouth to find a real estate agent, but Zanganas said it害羞草研究所檚 important to shop around.

害羞草研究所淚t害羞草研究所檚 important to find someone you connect with and is right for you,害羞草研究所� she said.

The next step is to figure out what you can afford, Zanganas said.

害羞草研究所淚害羞草研究所檝e had first-time homebuyers that say they want to buy a house in (affluent Toronto neighbourhood) Rosedale and they have a $900,000 budget,害羞草研究所� she said. 害羞草研究所淎 mortgage agent will help set your expectations properly.害羞草研究所�

害羞草研究所淭hey害羞草研究所檒l also flag all the additional closing costs,害羞草研究所� she added. 害羞草研究所淥ften first-time buyers don害羞草研究所檛 think about the extras.害羞草研究所�

Meanwhile, the federal government has launched several programs aimed at helping first-time buyers.

The recently announced Tax-Free First Home Savings Account gives new buyers the ability to save $40,000 on a tax-free basis towards the purchase of a first home in Canada.

害羞草研究所淚t害羞草研究所檚 a powerful way to come up with a down payment for a first home,害羞草研究所� said James Laird, co-CEO of Ratehub.ca and president of CanWise mortgage lender.

It害羞草研究所檚 an improvement from the Home Buyers害羞草研究所� Plan, which allows Canadians to withdraw up to $35,000 from a Registered Retirement Savings Plan to come up with money for a down payment but must be repaid within 15 years, he said.

Still, the new registered plan is slated to startnext year, so Laird said it will be a few years before it helps buyers.

Another new program called the First-Time Homebuyer Incentive offers up to 10 per cent towards a new home purchase through a shared-equity mortgage with the government.

But Laird warns new buyers to steer clear of the program, noting that co-owning a home with the government is an 害羞草研究所渙dd害羞草研究所� scenario that could backfire.

害羞草研究所淲e think it害羞草研究所檚 quite detrimental,害羞草研究所� he said. 害羞草研究所淭he government becomes a co-owner 害羞草研究所� they don害羞草研究所檛 pay the maintenance costs or property taxes, but they share in the potential appreciation. We find it flawed from many angles.害羞草研究所�

Mortgage loan insurance from the Canada Mortgage and Housing Corporation allows buyers to pay a smaller down payment in exchange for a fee of up to four per cent.

害羞草研究所淭he fee is clear and upfront and there害羞草研究所檚 no muddying of who owns what,害羞草研究所� Laird said.

However, mortgage loan insurance is available only for properties with a purchase price below $1,000,000. Laird said the maximum should be higher in cities like Toronto and Vancouver.

害羞草研究所淭he government has no interest in helping affluent people buy multimillion dollar homes,害羞草研究所� Laird said. 害羞草研究所淏ut if you buy a $1.2 million semi in Toronto with no parking, you害羞草研究所檙e not some rich country club guy. You害羞草研究所檙e trying to find a home for your family.害羞草研究所�

Meanwhile, even once homeownership is finally in reach, first-time buyers should expect to feel 害羞草研究所渁bsolutely sick to their stomach,害羞草研究所� he said.

害羞草研究所淭he normal first-time homebuying experience is an emotional roller coaster.害羞草研究所�

Real estate agent Zanganas agrees, noting that first-time homebuyers are 害羞草研究所渞eally afraid of losing their shirts and making the wrong decision.害羞草研究所�

害羞草研究所淚 always warn them that once they sign on the dotted line, they害羞草研究所檙e going to worry it was the worst mistake of their life. Everybody goes through that.害羞草研究所�

After welcoming a baby girl and settling into their new townhouse, Ross Davison and his wife, Katherine MacDonald, are breathing a sigh of relief.

害羞草研究所淧art of the magic of having to be rigorous in our search is that we really got to know all the little neighbourhoods in Ottawa really well,害羞草研究所� MacDonald said.

害羞草研究所淲e opened ourselves up to things we never would have considered before and we landed somewhere we are really happy.害羞草研究所�

Brett Bundale, The Canadian Press

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