Parents aren't paying for as many Toronto down payments as you think

The narrative of parents having to provide money for their children’s down payments to buy a home in Toronto is a common one. But in reality, the practice accounts for a small fraction of down payments.

The Toronto Regional Real Estate Board (TRREB) released the findings from a survey carried out in partnership with IPSOS for its 2021 Year in Review, breaking down the source of down payments for homebuyers in the Fall of 2021.

When looking at all buyers who purchased in Fall 2021, just 11% reported sourcing their downpayment from family or friends. Interestingly, this number hasn’t changed much in the past several years, remaining around 11-12% since 2015. When looking at just first-time homebuyers, the number goes up slightly to 17%.

Toronto Regional Real Estate BoardA buyer’s own savings seemed to account for the most significant chunk of down payments, with 35% reporting using savings outside of an RRSP and 14% using savings from an RRSP. Equity from a current home accounted for 27% of downpayment sources, and unidentified “other” sources made up the remaining 13%.

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These numbers differ from what was found in an October report from CIBC Capital Markets. According to the report, roughly 25% of first-time Toronto buyers received monetary gifts for their down payment in 2021, with the average down payment gift for a first-time buyer surpassing $130,000.