If you're dreaming of buying your first home, you’ve probably wondered, "How am I going to save up for it?" Well, let me introduce you to the First Home Savings Account (FHSA). It’s a fantastic tool that combines the perks of two other popular accounts—the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP)—to help you save for your first home. Let’s break it down in simple terms.

What Is the FHSA?

The FHSA is like a savings superhero, designed specifically for first-time homebuyers in Canada. It gives you powerful benefits:

1. Tax-Deductible Contributions:

   You can contribute up to $8,000 a year, with a lifetime cap of $40,000. The best part? Your contributions are tax-deductible! That means if you put money into your FHSA, you lower your taxable income for the year—and that could mean paying less in taxes.

2. Tax-Free Growth:

   Just like with a TFSA, the money you invest in your FHSA grows tax-free. Whether it’s earning interest, dividends, or capital gains, you don’t have to share a dime with the CRA (Canada Revenue Agency).

3. Tax-Free Withdrawals:

   When you’re ready to buy your first home, you can withdraw from your FHSA completely tax-free. Every dollar you saved goes directly toward your home purchase—no deductions, no catches.

4. Roll Over Unused Savings:

   What if you decide not to buy a home or your plans change? No worries. You can roll over unused funds into your RRSP or RRIF (Registered Retirement Income Fund) and keep enjoying tax-free growth for retirement savings.

Who Can Open an FHSA?

It’s not for everyone. To qualify, you need to be:

• A first-time homebuyer (you haven’t owned a home in the last four years).

• A Canadian resident aged 18 or older.

If you check those boxes, you’re good to go!

Pro Tips for Using the FHSA

1. Start Early: Even if you’re a few years away from buying, opening an FHSA now lets your money grow tax-free longer.

2. Max Out Your Contributions: Aim to hit that $8,000 yearly limit to get the most out of your tax deduction and savings potential.

3. Combine with Other Programs: Pair the FHSA with programs like the RRSP Home Buyers’ Plan for even more buying power.

Ready to Open an FHSA?

Opening an FHSA is straightforward. Many banks, credit unions, and financial institutions across Canada offer them. Check with your financial advisor or bank to find the best fit for you.

The FHSA is an incredible opportunity for first-time homebuyers to save smarter and faster. Whether you're just starting your journey or already looking at listings, every bit of savings counts.

Take the first step toward your dream home today! If you have questions or want to discuss how this fits into your home-buying plan, let’s chat. Book a call today—I’m here to help!

October was a busy month for the Greater Toronto Area’s real estate market. Home sales went up 44% compared to last year, as more buyers jumped back in, helped by lower interest rates. New listings increased too, though not as much as sales, which made the market a bit tighter than last October.

Prices held steady, with the average home selling for around $1.13 million, up just a little over 1% from a year ago. While there are still plenty of options for buyers, experts think prices could rise in the coming months as available homes get bought up faster than new ones are built.

The Toronto Regional Real Estate Board is also pushing for policies to help buyers with affordability, like lowering taxes on home purchases. These changes could make a big difference for new buyers and encourage more home construction in the GTA.

Let’s take a closer look at the details driving these trends:

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October saw strong growth in Toronto’s real estate market, with home sales in the Greater Toronto Area (GTA) up by 44.4% compared to October 2023. While new listings also increased, they didn’t keep up with the pace of sales, leading to a tighter inventory and more competitive market conditions.

Market Highlights:

• Sales Activity: The GTA recorded 6,658 home sales in October, a significant 44.4% increase from the 4,611 sales in October 2023. Month-over-month, sales also saw a rise, as October’s figures were up from September’s 6,470 sales, reflecting ongoing demand.

• Average Price: The average selling price across all property types in the GTA reached $1,135,215, a 1.1% increase year-over-year. On a month-over-month basis, the average price saw a slight uptick from $1,123,390 in September, indicating a stable price environment despite rising sales.

• Inventory: New listings totaled 15,328 in October, up 4.3% from October 2023. However, this marked an 18% decrease compared to the 18,742 new listings seen in September 2024, pointing to a tightening of inventory. Active listings also decreased from 6,658 in September to 4,611 in October, which may lead to more competition among buyers in the coming months.

• Months for active inventory This is a indicator I monitor closely and has been coming down as well indicating that the market is tightening. There was 3.67 Months of inventory in October, down from 5.1 in September.

What’s Driving This Market Activity?

The Bank of Canada’s recent rate cuts have improved borrowing conditions, making homes more affordable and encouraging buyers to step back into the market. With borrowing costs lower than they’ve been in months, demand has picked up, leading to higher sales volumes compared to last year.

Implications for Buyers and Sellers

With inventory shrinking and sales activity growing, we may see prices rise more significantly in the months ahead. For buyers, it’s a good time to act before inventory gets even tighter. Sellers, on the other hand, have the advantage of strong demand and fewer listings to compete with.

Looking Ahead

As we move into 2025, there may be further policy changes affecting affordability and market conditions. For example, TRREB supports the Conservative Party of Canada’s proposal to remove the GST from new homes under $1 million, which could provide relief for first-time buyers and encourage more construction to meet growing demand.

The Toronto market is definitely in motion, and whether you’re buying, selling, or just watching the trends, our team is ready to help you navigate these changes and find the best opportunities.