It’s no secret that buying a first home isn’t what it used to be. While previous generations could save for a down payment in just a few years, today’s aspiring homeowners face a far more challenging reality. It now takes the average Canadian urban buyer decades to save the recommended 20% down payment. This shift has left many wondering if homeownership is even achievable or if they’ll remain on the rental treadmill indefinitely. This is where alternative homeownership models come in.

Lack of affordable housing

Housing prices remain the largest obstacle to homeownership, especially in major cities like Toronto and Vancouver. According to the National Bank of Canada’s Housing Affordability Monitor, a household income of nearly $200,000 is needed to afford a representative home in Toronto, which averages over $1.1 million. For context, the average Toronto home price is now more than ten times the average income. At the same time, renting isn’t much easier. The cost of rent has climbed alongside housing prices, putting further strain on Canadians trying to save for a down payment. In cities like Toronto, rents continue to hit record highs, leaving many spending the majority of their income on housing costs alone. This cycle makes it incredibly difficult for young Canadians to save, leaving them stuck renting instead of moving toward homeownership.

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The need to qualify for a mortgage

Another significant barrier to traditional homeownership is qualifying for a mortgage. This can be especially challenging for certain groups, including newcomers to Canada or those who are self-employed. Even for individuals who do qualify, skyrocketing home prices mean they often take on substantial debt, raising fears of becoming “house poor”—when a large portion of income is tied up in housing costs. Alternative homeownership models are emerging to address these barriers, offering innovative ways to access the housing market. Programs like Key’s homeownership solution help you with the two biggest entry challenges—saving for a significant down payment and qualifying for a mortgage. With Key, you can move into a home with as little as 2.5% down and benefit from increases in home value over time, all while progressing toward full ownership at a predetermined price. If you’re an aspiring first-time homebuyer, alternative solutions like Key are designed to make homeownership more accessible and achievable in today’s challenging market. Learn more about how Key's program works here.

This article may include AI-assisted content. While we aim for accuracy, please double-check details or consult a professional if needed.

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