Rising concerns about Canada plunging into a recession are deterring prospective homebuyers, according to a new report.
The BMO Financial Group released its latest Real Financial Progress Index on Monday, revealing that many Canadians are taking a “wait and see” approach as the possibility of Canada descending into an economic recession increased from 60 per cent to 74 per cent from March to April 2025.
“Canada’s housing market remained under pressure heading into the spring, with sales and prices both weakening further,” said Robert Kavcic, senior economist at BMO Capital Markets.
“There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of B.C. and Southern Ontario.”
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The BMO survey examined how concerns about the economy have impacted prospective homebuyers’ decisions.
It found that over two-thirds (67 per cent) of prospective homeowners are waiting for interest rates to drop before purchasing a home. Two in five (38 per cent) Canadians are waiting for rates to drop to three per cent or lower before buying or refinancing a home.
The Bank of Canada announced its first interest rate hold of the year in April, maintaining the 2.75 per cent policy rate.
“Two-thirds (66 per cent) of millennials feel they had missed their homebuying moment — more than any other generation,” reads the report.
While 59 per cent of Canadians see homeownership as one of their greatest life goals, half believe it is less attainable than it was 12 months ago. Two-thirds (66 per cent) are less confident that they will own a home in their lifetime compared to five years ago.
BMO found that 38 per cent of homebuyers plan on buying one in the near future, but only 14 per cent of those Canadians plan to do so in 2025, and a quarter (24 per cent) plan on doing so in 2026 or later.
More than half (52 per cent) of prospective homebuyers would consider moving to a different province or country to afford to buy a home.
And 43 per cent of people who bought in Canada say they could not have obtained their homes without assistance from family.
National Trending Staff|. May 5 2025,
source: dailyhive.com
link: https://dailyhive.com/vancouver/canada-recession-homebuyers
