Real estate prices in Ontario have put home ownership so far out of reach that parents are increasingly having to help their children buy a home.
A new poll conducted by Abacus Data for the Ontario Real Estate Association (OREA) found four in 10 parents of young buyers aged between 18 and 38 helped their children with the purchase with money.
A sense of sympathy for how difficult it is to buy a home today compared to when they were young was a big reason for parents opening up their wallets. Respondents cited high home prices (88 per cent) and difficulty saving for a downpayment (49 per cent) as the biggest factors.
They also blamed a less secure job market, higher education costs, and fewer homes being built.
“Parents are becoming increasingly worried that their children may not be able to achieve the dream of home ownership, so they are pulling out all the stops to help them get their foot in the market,” said OREA CEO Tim Hudak.
“Ontario’s parents have seen first-hand the benefits of homeownership on neighbourhoods: it fosters vibrant and stable communities, improves quality of life, and has been the bulwark of Canada’s middle class for generations, so it is not surprising that they want the same for their children.”
Where the money is coming from
Of the parents who said they helped their children, 44 per cent say they dipped into their personal savings. Some even say they borrowed from their retirement savings or investments (15 per cent).
The amount of money given varies. On average, parents who loaned money lent $40,878 but those who handed over cash as a gift gave $73,605.
The poll found getting their children into the housing market was a big deal, with 91 per cent saying it’s important for their children to eventually buy a home.
It also found 80 per cent of respondents saying high housing costs are making the province a less attractive place to live and work.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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