Posthaste: In British Columbia, parents are forking out $204,000 on average so their kids can buy a home
Parents giving money to their kids to buy a home took off during the pandemic when real estate went through the roof.
But has today’s cooler housing market changed that?
Not really, says a new study by CIBC Capital Markets economists Benjamin Tal and Katherine Judge.
Since 2015, the share of first-time homebuyers who received financial help from family members rose from 20 per cent to 31 per cent, and though that trend has levelled off in recent years, it has not declined.
“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.
“While the benchmark home price has fallen by 14 per cent since its COVID-era peak, prices are still 33 per cent above pre-COVID levels, and that means that gifts have risen faster than home prices over that period,” said the study.
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.
The size of the gifts in British Columbia, Canada’s priciest market, have soared 90 per cent since 2019, well above the national increase of 73 per cent.
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.
A recent study by Ratehub.ca on how much income is
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