Gen Z is entering adulthood at a time of economic flux, with many hoping to buy their first homes despite formidable barriers in Vancouver’s real estate market. Recent policy measures by provincial and federal governments aim to ease the path for first-time homebuyers, including new mortgage reforms, the Tax-Free First Home Savings Account (FHSA), and the Home Buyers’ Plan (HBP). But do these policies go far enough, or will affordability remain an elusive goal for Gen Z? 

The First-Time Home Savings Account and Home Buyers' Plan: Benefits and Limitations

The FHSA and HBP are two federal programs designed to help buyers save for down payments. The FHSA allows first-time homebuyers to save up to $40,000 tax-free, combining the benefits of a TFSA and an RRSP. While it offers valuable tax relief, saving up this amount is still challenging, especially for younger buyers grappling with Vancouver’s high cost of living. 

The HBP, which enables individuals to withdraw up to $60,000 from their RRSP for a home purchase, provides additional support. However, as Garde MacDonald, Director of Advisory for MLA Canada, points out, “The Vancouver market is incredibly unaffordable, especially for young buyers who struggle to save a down payment and do not have help from family.” Vancouver and Toronto are among the most expensive markets in Canada, requiring larger down payments and significant financial discipline—qualities often strained under today’s economic pressures. 

Recent Mortgage Reforms: Longer Amortizations and Higher Caps 

The federal government has also enacted mortgage rule changes specifically for first-time homebuyers, expanding amortization periods to 30 years and raising the insured mortgage cap to $1.5 million. These reforms give Gen Z buyers more breathing room by lowering monthly payments, but they come with trade-offs. “Longer amortizations reduce monthly payments by about 8%, but they also lead to 26% more interest over the life of the loan,” explains MacDonald. “For most, it’s a long-term liability masquerading as a short-term benefit.”  

Raising the insured mortgage cap to $1.5 million aims to give Gen Z buyers more options in high-priced markets like Vancouver. But whether this translates into a significant increase in homeownership remains uncertain; even with these changes, many younger buyers still struggle to meet the income and credit thresholds required for mortgage approval. 

The BC Election Promises for First-Time Homebuyers 

In the recent BC provincial election, the re-elected NDP pledged to make homeownership more attainable for first-time buyers, particularly through programs that could potentially fund up to 40% of the cost of new homes in specific projects. If implemented, this program would effectively lower the price of entry for many buyers, allowing them to enter the market without the daunting task of saving an enormous down payment. 

However, MacDonald cautions that while this policy may provide short-term benefits, it could also place a financial burden on taxpayers over time. “This initiative may help more people afford homes, but the cost will be high—initially estimated at $1.3 billion. Future generations of taxpayers will bear that burden, so it’s a benefit with lasting implications,” he notes. 

Employment Challenges and the Gig Economy's Impact 

One of the largest obstacles Gen Z faces is securing stable, well-paying employment. In BC, youth unemployment is around 13.7%, significantly higher than the national average of 6%. This disparity makes it even harder for young people to save for significant investments, including a home. Vancouver’s cost of living and housing prices further intensify the challenge, creating what MacDonald calls “substantial hurdles” for first-time buyers in the city. 

Additionally, many Gen Z individuals are opting for freelance or gig economy work. While this offers flexibility, it creates complications when securing mortgage financing. “Banks still require stable income levels for mortgage qualification, so many gig workers will need co-signers to meet these thresholds,” MacDonald explains. This trend has led to an increase in financial support from family, known as the “Bank of Mom and Dad.” CIBC reports that approximately 30% of first-time homebuyers now receive financial assistance from their parents, with an average gift of $115,000. 

Gen Z's Evolving Housing Preferences: Flexibility Over Ownership? 

Given these financial and employment barriers, Gen Z is exploring alternative housing solutions. Many younger buyers are opting for smaller, more affordable homes or even co-ownership arrangements. Additionally, some are open to micro-apartments or co-living spaces as a means of entering the market without shouldering the full burden of homeownership costs. 

MacDonald notes a noticeable shift toward urban, flexible living arrangements. “Gen Z values flexibility and proximity to amenities, often preferring urban centres. Many will rent longer, given Vancouver’s high prices, while others may consider alternative setups like co-living to gain a foothold.” For some, homeownership may not hold the same intrinsic value as it did for previous generations, with many seeing renting as a viable, long-term option that offers greater freedom. 

The Long-Term Outlook for Gen Z in Vancouver's Real Estate Market 

While these policies and trends may create pockets of opportunity, many Gen Z buyers will continue to face a prolonged journey to homeownership. With rising demand for rental units and an increase in rental property construction, the proportion of long-term renters is expected to grow. Vancouver’s real estate market could see a demographic shift toward renters over owners, as affordability challenges persist. 

This shift in ownership patterns is likely to have a lasting impact on Vancouver’s housing market. As demand for rental units increases, developers are building more rental properties than ever before. This trend may provide greater choice and affordability for renters while reducing pressure on the ownership market. 

As for ownership, Gen Z’s journey to homeownership will depend on continued support from government policies, family assistance, and alternative financing options. “The market for first-time buyers is evolving, but affordability remains the primary challenge,” MacDonald emphasizes.

Conclusion

For Gen Z in Vancouver, the dream of homeownership remains challenging but not impossible. Recent policy measures, such as the Tax-Free First Home Savings Account, expanded mortgage amortizations, and BC’s proposed new housing subsidy program, offer some relief but may not be enough to fully bridge the affordability gap. It remains to be seen whether these policies will spark a shift, or if the majority of Gen Zers will lean into long-term renting or alternative housing arrangements, introducing a new era of flexible urban living in Vancouver.