26 April 2018

Before the implementation of a mortgage stress test, their maximum homebuying budget was $243,349 (including a 20% down payment) at a 3.09% interest rate.

However, the new rules introduced by the OSFI, require from buyers proving they can afford an uninsured mortgage by qualifying at their contract rate plus 2% or at the five-year benchmark rate of the central bank (today 5.14%).

As a result, the average millennial homebuying budget went down to $203,246 under a 5.14% rate, marking a decline of $40,103 or 16.5%.

“You may buy a property for this money somewhere in the country, but not in case of Vancouver and Toronto,” – says Tom Storey, a realtor with Royal LePage specializing mostly on first time homebuyers. “An average couple will probably have to switch to suburbs with that budget”.

In case two incomes are combined, the average millennial couple budget rises to $406, 479, but it’s still less than $486,674 reported before the new rules implementation. With the drastic price differences across Canada, this budget may offer you a good property in one region and almost nothing in another.

For example, a millennial couple with a budget of $325,000-$425,000 can buy a home with 1,736 square feet of space in Halifax and only with 788 square feet in the Greater Vancouver Area.