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 increasingly favourable market conditions, many are carefully planning and possibly delaying their new-home purchases, according to a recent survey from Royal LePage.

The survey, conducted by Burson, indicates 13 per cent 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 per cent) say they are planning to make a purchase in 12 to 24 months.

“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,” says 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.

Methodical approach

“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.”

Thirty-six per cent of Royal LePage real estate professionals report an increase in first-time buyer activity so far this year, while 25 per cent report no change. This, despite home prices holding relatively steady, a trend that would typically encourage new buyers to enter the market.

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 per cent) said they would not receive any help. Meanwhile, 41 per cent of first-time buyers said they would.

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

More than half (53 per cent) of first-time buyers plan to make a down payment of at least 20 per cent when purchasing a home, while 39 per cent intend to buy with a down payment of less than 20 per cent and obtain mortgage insurance.

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

When asked about the typical budget range for first-time homebuyers in their market, 55 per cent of Royal LePage professionals said it was between $500,000 and $750,000, followed by 19 per cent 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 per cent year-over-year to $870,200, while the median price of a condominium decreased 0.8 per cent to $592,000.

Ontario market highlights

In Ontario, 15 per cent of survey respondents say they are actively working towards the purchase of their first residential property within the next two years (three per cent plan to buy within the next 12 months, while 12 per cent plan to buy in 12 to 24 months).

“First-time buyers who were once priced out of the market are beginning to re-emerge, encouraged by softening home prices and lower mortgage rates,” says Tom Storey, sales representative and head of The Storey Team, Royal LePage Signature Realty in Toronto. “Still, affordability remains a major challenge.”

When asked what the typical budget range is for first-time homebuyers in their market, 73 per cent of Royal LePage professionals in Ontario said it was between $500,000 and $750,000. Fifty-four per cent of first-time buyers plan to purchase a home with a down payment of at least 20 per cent.