by Ravipal Atwal
First Time Buyer Challenges

It is probably easier to get a Canadian Visa or PR than buying a home in Canada, especially Toronto and Vancouver areas. Buying real estate in Canada has become a big challenge, newcomers who move to Canada with a dream of a good life and beautiful home, finds out sooner or later that it has become extremely difficult to buy a house in Canada.

My friend who was selling their house in 2014 for $650k was thinking it’s a crazy high price and the real estate is going to CRASH soon. That same house is worth $1.5 Million right now and whoever bought that house in 2014 really got a deal if we compare and we were thinking it’s all time high.

Personally, I wish for Real Estate Crash, My Net Worth will definitely take a hit but at least I will be able to buy more Rental Properties. Year by Year, I feel like I can’t find any good deals anymore.

Let’s talk about Challenges

1. House Price + Down Payment + Closing Cost

This one is obvious, Average house price In Toronto is around $1 Million and Vancouver is way over $1 Million. We need at least a down payment of $250K to buy $1 Million house + $40K for Inspection\Lawyer\Land Transfer Tax.


CMHC INSURANCE: It’s insurance which can help you bring down the down payment but they add a fee to the total mortgage amount. That is fine because you will get a better interest rate for the first 5 years which normally helps you recover the majority of the fees you paid. You can also do 30 years Amortization instead of 25 years using CMHC and this will help you to bring down your monthly payment.


It works like this:

  • You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
  • You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.


Let’s say you have the money to pay down payment and closing costs but the bank wants to see your income to make sure you can afford monthly payments for the house.

In Reality, we need $175K income per year to buy a $1 Million home. How the hell newcomers will get that kind of job, maybe a very small percentage of people can have this kind of income but Majority of people never make that kind of money.

Now one thing I want to tell you. No one can afford houses in Toronto and Vancouver, There is a big scam going on and I am sure the Banks and Government knows about this.


I am not talking about Chinese investors. Another big problem for newcomers in Canada is that everyone has become an investor. People I know who didn’t even invest $100 has 3-4 houses as investment. There is not a single family I know who is living there for a long time that doesn’t own more than 1 house. Interestingly, most of those houses are rented to international students.

Investors are betting against each other and raising prices drastically, they are expecting that home prices will keep going up crazy.

Newcomers are trying to buy homes but they are always losing their deals to investors who want to pay more.
You need to find a very good REALTOR, who can close the deal for you. I have seen the difference between good and bad realtors. I was with one realtor for 1.5 year and was losing every single deal and once I changed to the one I work with now, I am getting deals which I should never have gotten. It’s like getting properties from points that it’s impossible.

MORE TIPS: Here are few things you can do

  1. BUY CONDO: If you can’t buy house, buy a CONDO, at least you can live there instead of paying rent and eventually upgrade to house with some more savings and with Condo price going up
  2. BUY PRE-CONSTRUCTION: you don’t have to make the whole down payment in one shot, you can pay some now and pay more as the construction progresses. Make it easier for someone still saving.
  3. PARTNER UP: Buy a house together, one family can live on the top floor and the second family can live in the basement and decide the monthly payment accordingly, like less for one living in the basement. Plan to do this for 4-5 years and then either sell it between each other or sell the house altogether to buy 2 separate houses.
  4. MOVE TO CHEAPER CITIES: People come to Canada from other countries and then they don’t want to leave Toronto. I don’t understand why. People should go to the cities in other provinces where houses are cheaper. We came to Canada for a better life, not to pay for high price houses in Toronto and keep paying mortgages all our lives. Especially when people make almost the same amount of money in most of the cities in Canada.

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