Family help to get on the property ladder has become the norm in Canada with the size of gifts soaring
Parents giving money to their kids to buy a home took off during the pandemic when real estate went through the roof.
Not really, says a new study by CIBC Capital Markets economists Benjamin Tal and Katherine Judge.
“Homebuyers relying on a wealth transfer from their parents in order to purchase a home is becoming the norm in Canada,” said the economists.
Moreover, the amount of these gifts has continued to climb, rising 73 per cent higher than in 2019. The average gift nationally now sits at $115,000.
Parental support is especially apparent in Ontario and British Columbia, where high home prices have necessitated a higher reliance on family help.
In these provinces, 36 per cent of first-time homebuyers receive a helping hand, five percentage points higher than the national average.
Parents here on average are giving their children $204,000 towards a first home.
Even Ontario is tame by comparison. The amount of gifts in this province — where real estate is far from cheap — rose just 52 per cent since 2019 and now sits at $128,000.
In just one month, the income needed to buy a home in Victoria, B.C., rose $1,230 to $172,180 a year.
Vancouver’s required income hit $232,950, up $800.
Hamilton, Ont., saw the biggest increase, Homebuyers now need an income of $171,100 to afford a home here, up $1,550.
But the $215,920 a year you need to afford a home in Canada’s biggest city is still out of reach for many.
Wherein lies the problem. Not everybody’s parents can afford to help their children onto Canada’s very expensive property ladder.
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