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By Gordon Hamilton

Despite headline-grabbing stories about million-dollar houses pushing home ownership out of reach in Canada鈥檚 large cities, there鈥檚 still plenty of opportunity for first-time buyers in certain segments of the Canadian real estate market, says Dominion Lending Centres Chief Economist Sherry Cooper.

Single-family home prices have been surging in cities like Toronto and Vancouver, but that鈥檚 driven largely by a shortage of land: You practically need to knock down an older home in order to build a new one. It鈥檚 the supply-demand story, Cooper says. Land for single-family homes is in short supply while demand is strong, driving double-digit price increases.

But that鈥檚 not the case in the condo market, where prices have not been escalating as quickly. Condos, and housing in those parts of Canada where the land supply is not an issue, are still an affordable option.

鈥淭here are differences in the housing market depending on the sector and the region,鈥� she says. 鈥淔or example, condo prices in Toronto are rising at single-digit rates. Part of that is because there has been a dramatic increase in construction, so that the supply of condos is increasing very sharply.鈥�

At the same time, retiring boomers are often helping their children buy homes. Aid from mom and dad coupled with the increase in supply, has resulted in the rate of home ownership rising.

鈥淲e are in a sweet spot in demand for housing right now because in Canada, the growth in the number of first-time buyers 鈥� roughly aged 25 to 35 鈥� is at a relatively high level. It鈥檚 stronger than what we have seen since the baby boomers came of age. First-time homeowners are still out there buying and in fact they represent roughly 30 per cent of new home sales, even in Toronto and Vancouver,鈥� she says.

鈥淲hat鈥檚 different is that it now takes two incomes to buy a home rather than one, as it was way back when, and also your first home may well be a condo and it may well be far from the city centre and it may well be quite small.鈥� But the reality is that low interest rates have helped to make housing more affordable.

鈥淏ut once you get in the door, there鈥檚 the whole notion that house prices will rise and you will have greater equity to move up next time around,鈥� she adds.

These differences between single-family housing markets and multi-family housing markets need to be recognized by governments in their attempts to make housing more affordable, Cooper says. Housing and construction are key strengths in the Canadian economy right now, and government intervention 鈥� like the B.C. government鈥檚 move to increase the property tax for expensive homes 鈥� needs to be carefully weighed.

"You don鈥檛 want to dampen what has been a very significant component of economic growth."