Over 40% of younger Ontario homebuyers had their parents pitch in on purchase
Housing prices are through the roof in much of the province, and as real estate moves further out of reach from younger would-be homebuyers, a surprising percentage of parents are offering a helping hand (full of cash) towards their kids' increasingly unrealistic goals of owning property.
A recent poll conducted by Abacus Data for the Ontario Real Estate Association (OREA) found that four in ten parents of homeowners aged 18 to 38 gave their child financial assistance when purchasing a home.
And it's not just a bit of help we're talking about, with loans and financial gifts averaging in the tens of thousands of dollars as parents dig deep to help the next generation buy into a housing market amid an affordability crisis.
With the provincial average home price rapidly closing in on the $1 million mark and Greater Toronto Area prices swelling to an alarming average of $1,242,793, it shouldn't come as much of a shocker that young homeowners are seeking help from their financially-established parents.
Delving deeper, the Housing Affordability in Ontario: Perceptions, Impacts, And Solutions (Wave 2) report found that of parents who helped out their children, a whopping 44 per cent dug into their own savings, and even more worrying, 15 per cent borrowed from their own retirement savings or investments.
But how much are parents coughing up to give their kids a toehold in the housing market? Well, it turns out they're forking over average loans of $40,878 and average gifts of $73,605.
The report found almost unanimous concern among parents of young adults who don't own property, with 91 per cent polled saying that it's important their children be able to purchase a home eventually.
"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 and former Ontario PC leader Tim Hudak.
Almost 90 per cent recognized that today's young adults are paying far more to buy a home, while close to half of the respondents cited the challenges buyers face in just being able to afford a down payment on a home.
A staggering 80 per cent think that housing costs are making the province a less attractive place to live and work, which Hudak is warning could lead to the best and brightest minds looking elsewhere in the country for cheaper homes.
"We are in a housing affordability crisis being driven by severe lack of supply, and increased demand, especially around 'missing middle' type properties," said Hudak.
The former politician warns that "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."
The report indicates that these sentiments are widespread, the poll showing 92 per cent of Ontarians — regardless of age — believe future generations deserve the same housing opportunities as the boomers before them.
Over half of respondents agree that the province is not building enough housing, and over three-quarters think that the province should make affordability a higher priority.
So if you find yourself making a withdrawal from the bank of mom and dad to get in on the real estate game, at least know that you have plenty of company among young homebuyers.
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