Canadian Real Estate Could Struggle if First-Time Homeowners Can’t Move Up

On our recent podcast, Dave and Steve Saretsky discuss why first-time homeowners who are stuck in place could drag down Canada’s housing market for years.

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 I think the market could stay sticky for quite some time because a lot of the first time buyers can’t move up. The housing prices have come down so much, they’ve lost their equity that would form the down payment for their move up purchase, and that may take years to play out. And so we could have a, a relatively quiet market, at least on the move up front

yeah, that’s an interesting one. Like anecdotally, like again, we work with our clients and what we’re seeing on the ground like. You have a lot of people that are trying to move up, but like, oh, well, yeah, I bought this condo in like 21. And like, you know, once they start paying like the fees and the taxes, like I’m losing money.

And like, like they’re not okay with that. And I’m like, well, again, if you, but if you wanna move because your family’s growing, like you’re gonna have to take the hit probably on the sell side and you’re gonna have to go try to make it up on the buy side. You know, your house has come down, your condos come down.

You made a very important point that if you’re at x. And you’re trying to move up to say, 1.5 x To some extent, you could argue you’ve benefited from the falling market because in absolute terms, the more expensive home has fallen more dramatically.

The challenge is yours has fallen enough in many instances that again, you’ve wiped out all of your equity, or at least a big chunk of it, and you don’t have enough of a down payment to take advantage of the fact that the math is somewhat positive. And that’s the part that worries me. I don’t think that’s getting much attention, by the way, but in real life, and of course, that’s where you’re dealing in the real.

You’re seeing it all the time.

You nailed it.