According to the data released by the CMHC, about one in five first-time homebuyers in Canada get money to help with their down payments. “The bank of Mom and Dad” is a phrase that gets thrown around a lot in cities like Vancouver and Toronto, cities that have seen real estate prices surge over the last few years.
A survey from RateHub says that more than 40 per cent of British Columbians buying a home got help from their family. A BMO survey also found that almost half of young Canadians expect help from family of their parents when purchasing their first home.
For millennials, it is not easy on their parents. There is the stigma of full grown adults especially those with well-paying jobs, asking for help with a milestone purchase. The average Baby Boomer was probably able to afford their first home comfortably in the 1960s and 1970s, which is not the case nowadays even for those younger Canadians with well-paying jobs.
Not all young Canadians have families that can loan those thousands of dollars, restricting many hard working young Canadians from the property market and leading to a greater stratification in this country’s largest cities.
In a 2014 feature, journalist Leah McLaren argues that this transfer of wealth from Baby Boomers to the younger generation is helping prop up the market. It is also a way to add more debt on the shoulders of soon-to-retire boomers and already debt-ladened millennials should the market crash, nobody wins in that scenario.