Ontario home prices are dropping—but millennials aren’t rushing to buy.
A recent survey from the Bank of Montreal (BMO) suggests many millennials believe they’ve already missed their chance at homeownership. Two-thirds (66%) of millennials feel their window to buy a home has closed, even as housing prices fall and interest rates ease.
The Canadian Real Estate Association forecasts a 4.2% decline in Ontario home prices in 2025 compared to last year. Meanwhile, the Bank of Canada’s overnight lending rate has fallen from 5% to 2.75% over the past 12 months. Yet uncertainty about the economy has many potential buyers sitting on the sidelines.
“Canadians are feeling very concerned about where things are in the economy right now, and that’s spilled over into the housing market,” said Tony Tintinalli, BMO’s Head of Specialized Sales.
Despite the recent cooling in housing prices, prices remain significantly higher than they were in 2021. Job security is also a concern—particularly for workers in Ontario’s auto, steel, and aluminum industries—making many hesitant to take on a mortgage.
Tintinalli encourages millennials to leverage financial planning and tax-advantaged savings tools to better prepare for homeownership:
- First Home Savings Account (FHSA): Contribute up to $8,000 annually, up to a $40,000 lifetime limit, tax-free.
- RRSP Home Buyers’ Plan: Withdraw up to $35,000 from an RRSP to buy your first home.
- Financial Checkup: Meet with a financial planner to review savings, assets, debts, and cash flow.
He also recommends paying down high-interest debt and saving at least six months’ worth of expenses as a buffer.
As many Canadians renew their mortgages, refinancing may help reduce monthly payments. In addition, the federal government plans to cut the GST on new homes priced under $1 million for first-time buyers—potentially saving up to $50,000.
Still, Tintinalli stresses the importance of preparation.
“Meet with a mortgage specialist to understand what you can afford,” he said. “It allows you to be really prepared when you begin the home-buying journey.”