Experts say first-time home buyers could help the Canadian real estate market recover from recent declines if they take the opportunity to purchase homes at a time when mortgage rates and housing prices are much more favourable than they used to be.

Phil Soper, the president and CEO of Brookfield Real Estate Services, said first-time buyers represent "the largest buying demographic in any market."

And as he explained to CTV Newsnet on Wednesday, Soper said these younger buyers will be key to getting the real estate market turned around.

"It's clearly easier for someone who has already got a rental accommodation to take a wait and see attitude," said Soper, referring to first-time buyers who have yet to own their own home.

"Just like credit markets, when first-time buyers aren't entering into the market, those at the entry level can't move up and those in the middle can't move to the top. So, the machinery of the industry grinds to a bit of a halt. We need to find a way to get the first-time buyers back in and engaged."

Because Canada did not have the same housing problems as the U.S. did, there are comparatively fewer sellers in the Canadian market at the moment, Soper said.

Canada did, however, see declines in its housing starts: In 2008, housing starts were down to 211,056, representing an eight per cent decline compared to the average number of housing starts in the previous four calendar years.

According to Scotiabank resale activity fell by 17 per cent last year, and housing prices dipped by one per cent overall.

Scotiabank predicts that things will worsen in 2009, with housing starts predicted to fall to 155,000 new units that will be accompanied by an expected 15 to 20 per cent decline in resale transactions and a 10 per cent drop in prices.

But with a combination of lower housing prices, historically low mortgage rates and targeted government incentives, Soper said he expects these first-time buyers will be tempted "to take a hard look at home purchases."

Scotiabank senior economist Adrienne Warren said an important group of first-time buyers will be the baby boomers' children, whom she expects will help bolster demand for housing as they enter the real estate market in the near future.

"The baby 'echo' boomers that are now just graduating university, going out on their own...will be an increasingly important demographic behind the pickup in some sales," Warren said, noting that new immigrants will also play a major role in future sales.

Soper predicts that things will start to pick up in the second half of 2009, after a sobering start to the year that saw national average home prices sitting 11 per cent then they were the previous January.

"Certainly the first quarter is going to continue to be very slim, particularly in terms of the number of homes trading hands and then we should see relative improvement throughout the balance of the year," Soper told CTV Newsnet.

Warren said it is most likely that the real estate market won't see a substantial recovery until 2013 or 2014.

Both Warren and Soper were speaking at an annual real estate conference in Toronto on Wednesday.

With files from The Canadian Press