40% of Ontario's young homeowners received money from their parents

Feb 23 2022, 8:49 pm

Young Ontarians looking to become homeowners are frequently turning to their parents for financial support.

A new report from the Ontario Real Estate Association (OREA) found that 40% of parents with children aged 18-38 years of age provided financial support to facilitate the purchase of a home.

This number is somewhat higher than what was seen in an October report from CIBC which found that 30% of first-time buyers across Canada had received parental support. But with Ontario being home to some of the most expensive real estate prices in the country, an above-average number isn’t entirely surprising.

Of those who offered financial support, 71% of parents provided a gift and 61% provided a loan. On average, the gifts were $71,000 and the loans were $41,000. Nearly 45% of parents who helped their children pulled from their own general savings, meanwhile 15% borrowed from retirement savings or investments. The parents surveyed overwhelmingly recognized that it’s harder to buy a home now compared to when they were in their 20s, largely due to high house prices and the difficulty of saving for a down payment.

“Parents are becoming increasingly worried that their children may not be able to achieve the dream of homeownership, 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.”

Even with all of this parental support, the dream of homeownership is still out of reach for many Ontarians, with only 40% of parents of children 38 years or younger saying they have children who currently own their home. And it’s not that young people don’t want to own a home — over 80% of non-homeowners aged 18-44 want to own a residential property. Just 22% of respondents said they would be happy renting for the rest of their lives.

Sadly more than half — 55% — of non-homeowners have either given up or are very pessimistic about the possibility of buying a home in the community they want to live in.

“We are in a housing affordability crisis being driven by severe lack of supply, and increased demand, especially around ‘missing middle’ type properties,” Hudak said. “Without meaningful action at all levels of government, Ontario’s millennials and young families will be forced to look outside the province for their first home, leading to brain drain and negatively impacting our economic competitiveness. To bring affordability home for young Ontarians, we need to be continually increase housing supply and choice in the market, across the province.”

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Laura HanrahanLaura Hanrahan

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