Throne Speech sees a flurry of proposals to improve affordability – but does the new Cabinet have its work cut out?
Measures aimed at restoring housing affordability and transforming the Canadian economy featured prominently in this week’s Throne Speech, putting the effort to unlock Canada’s housing market front and centre as the 45th parliament gets underway.
But easing access to housing for younger Canadians could prove easier said than done, with the market currently in the throes of a generational affordability crisis even despite a recent slide in home prices across some of the country’s most expensive cities.
As expected, parliament’s commencement speech – delivered amid much fanfare by King Charles – included pledges to turbocharge the pace of homebuilding and scrap the Goods and Services Tax (GST) on first-time home purchases up to and including $1 million.
That tax would also be trimmed, a motion tabled by finance minister François-Philippe Champagne said, for first-time buyers on purchasing falling between $1 million and $1.5 million.
Government action on housing affordability is sorely needed, but the fact that average wages are languishing well beneath the levels needed to save up for a downpayment in Canada’s major cities is a problem with no easy solution, Mortgage Scout agent Christelle Mwamba (pictured below) told Canadian Mortgage Professional.
While the required income to purchase a home fell in seven of 13 urban markets surveyed by Ratehub in April, plenty still need eyewatering sums to afford an average deposit.
In Toronto, households required an income of $205,850 for a downpayment last month; in Vancouver, that amount rose to $238,970; and six other cities on the list (Hamilton, Calgary, Ottawa, Halifax, Victoria, and Montreal) needed six-figure incomes.
That adds up to an affordability crisis that won’t be solved at the drop of a hat, according to Mwamba. “I think it’s going to be really, really tough for first-time homebuyers between the ages of 25 and 34 to buy anything right now,” she said.
“I think they’re going to have to wait until these new houses are built. The income in the GTA [Greater Toronto Area] for a young [couple] between 25 and 34 is only, combined, $100,000. You can’t buy anything at $100,000.”
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— Canadian Mortgage Professional Magazine (@CMPmagazine) May 28, 2025
Government aims to restore affordability through influx of new supply
New housing minister Gregor Robertson commented shortly after being announced in his new role that home prices didn’t necessarily have to come down to restore affordability, although Carney later clarified that they would naturally fall in the medium term when new inventory comes to market.
The government eventually intends to see nearly 500,000 homes built a year in Canada, nearly doubling the pace of construction through cooperation between the public and private spheres.
That plan includes the construction of a new entity, Build Canada Homes (BCH), allowing the government to construct affordable housing at scale, provide more than $25 billion in financing for various building initiatives, and support affordable homebuilders through low-cost financing.
No short-term solution in sight to younger Canadians’ housing woes
A flood of new inventory could ultimately help bring affordability closer for younger Canadians – but for now, the prospect of purchasing a home is firmly out of reach for scores of would-be buyers.
The median age of a first-time homebuyer in Ontario jumped in the decade between 2014 and 2024 from 36 to 40, according to a survey by land registry service Teranet.
Mwamba said standalone buyers in their twenties are becoming steadily scarcer in the Toronto market, even despite the growing prominence of the so-called Bank of Mom and Dad – downpayment assistance from family members to fund the purchase.
“I’m seeing a lot more people aged 35 and over that are now buying – versus before, when you were in your twenties, buying a home was such an investment and you could start young because you build the equity,” she said.
“Now with first-time homebuyers, the age gap has actually changed. The young generation is not jumping over to buy a house right now. There’s a huge generational gap. For younger first-time homebuyers, it’s going to be very difficult, even with the Bank of Mom and Dad giving you the downpayment. In terms of affordability, the income is not there.”
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