A potential 30% increase in first-time home buyers could be coming to Ontario

Experts are weighing in, as recent trends indicate that January could be a boom time for real estate in Ontario.

This past week, the Bank of Canada announced that it would reduce the overnight interest rate to 3.5 percent.

Even if this is the last dip for a while, economists believe that first-time homebuyers may have a substantial edge.

Specifically, since this cut runs alongside recent amendments to insured mortgages (which boost the national price cap to $ 1.5 million) and the expansion of amortizations for first-time buyers — moving the timeline up to 30 years.

Rishard Rameez, who operates the Ontario-based real estate platform Zown, has been assessing these market trends to understand what 2025 may look like for would-be home buyers in Ontario.

“This December has been very different for us compared to last year. As of now, we are seeing a significant increase in inbound calls from people preparing a home purchase. Over the next two or three months, we are likely going to see a 20 to 30 per cent increase in first-time home buyers,” Rameez told INsauga.com.

Rameez notes that even with a new buyer-friendly environment, the projected January boom is still the byproduct of a lot of patience, specifically, since as far back as the early days of the COVID-19 pandemic, buyers have poised themselves to pounce on any opportunity once interest rates lower.

Parallel to this pending blitz is the fact that Ontario has seen a large number of new arrivals over the last few years.

“We have had many people arriving in Canada in the last four or five years looking for a new place to live. They had to wait for about two years to get their permanent residency, and now that the process is over, they are ready to buy as well,” says Rameez.

Data from the Toronto Regional Real Estate Board (TRREB), noted that in 2024 alone, 21 per cent of newly arrived immigrants put home purchase at the top of their list of priorities.

Rameez notes that most new buyers will make a move in January to avoid price jumps. However, most sellers won’t be listing their property until later in the year for this exact reason.

“A lot of sellers know this, so that’s why they are holding back until spring to list their property. As of now, there are not a lot of options for buyers to pick from, as sellers are waiting for the spring market, hoping that demand will be significant enough to get what they want,” says Rameez.

Rameez says the next two months will be the only window available for buyers to lock in on any offers that aren’t digging their heels in until later in the year.

According to the TRREB, in 2024 only 37 per cent of homeowners were likely to list their properties in the GTA.

A metric that, according to projections, may likely change come spring 2025.

However, even though this timeline of opportunity may benefit the individual buyer, if everyone goes for the same prize at once, it can greatly wound the overall process.

“If all potential home buyers are in the market at the same time, it is going to significantly hurt first-time buyers. Because for second-time buyers, if the market demand is high, they are going to get a better price for the home they are selling as well,” says Rameez.

This open season would steamroll first-time buyers as most of their leveraging income comes from savings, while second-time buyers have equity already on standby with money made from selling their first home, giving them a substantial leg up in the event of a flooded market.

As a result of this looming prospect, Rameez’s advice to new home buyers is to, essentially, watch their step and take it slow, as rushing in can lead to unforeseen results.

“Know what you can afford before jumping into the market because as a first-time buyer, there are only so many things you can account for,” says Rameez.”There are some things that sure, you can only learn as you go but at the end of the day there is no ‘good time’ or ‘right time,’ only the time that works for you.