![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/02\/canadian-housing-market.jpg\")
<\/a><\/p>\nPhoto: Dennis Jarvis\/Flickr<\/a><\/em><\/p>\n If the Canadian government acts on a major national industry group\u2019s recommendation to help first-time homebuyers get a leg up, it will still fall short of providing the relief much needed in the pricey Toronto and Vancouver markets, a new report suggests.<\/p>\n Earlier this month, the Canadian Home Builders\u2019 Association (CHBA) said it was in talks with federal policymakers<\/a> about housing affordability. The CHBA floated the idea of bringing back 30-year mortgages for first-time buyers, something policymakers scrapped in June 2012<\/a>.<\/p>\n While a homebuyer in Canada can obtain a mortgage from a federally-regulated lender with an amortization period (that\u2019s how long a borrower has to pay back their loan) as long as 35 years, insured mortgages are capped at 25 years under the current rules.<\/p>\n With an insured mortgage, a homebuyer can put down as little as 5 percent towards the value of a property, making it a viable option for often more cash-strapped first-time homebuyers who can\u2019t cough up the 20 percent required for an uninsured loan.<\/p>\n\n Extending the amortization period, then, makes sense as an affordability-focused measure. After all, it does give a shot in the arm to borrowers\u2019 potential buying power.<\/p>\n In fact, Capital Economics calculates first timers\u2019 buying power would be lifted by 8 percent if they could only have five more years to pay back their mortgages, the economic research firm says in a Canada Economics Update.<\/p>\n However, although that may have a meaningful impact in housing markets across the country, in pricey markets such as Toronto and Vancouver, it\u2019s not enough.<\/p>\n \u201cThe problem, though, is that these buyers\u2019 budgets are typically far smaller than average house prices, especially in the big cities,\u201d writes Stephen Brown, a senior Canadian economist for Capital Economics.<\/p>\n There is a considerable gap between the average first-time buyer home price and the average home price in Toronto and Vancouver, Capital Economics notes.<\/p>\n \u201cChanging the rules for first-time buyers would therefore do relatively little to support the housing markets in Toronto and Vancouver,\u201d Brown continues.<\/p>\n