Canadian Parents are seeing their children priced out of the real estate market and anxious to help. The amount of money given to children is rising sharply, speeding the transfer of wealth from one generation to the next and contributing to soaring home prices.
~70% of Canadian homeowners over the age of 65 are mortgage-free and hold $1.2T in equity in their homes, from $850B in 2016. (CREA and Rennie Group).
With the typical home price in Canada > $700K, it is difficult to save enough for a down payment.
In the Toronto region prices increased to $1M while Chilliwack and Victoria in BC, as well as Guelph, Kitchener-Waterloo, and Hamilton in Ontario are approaching $1M.
As of the end of March, it took 63-mo to save for the minimum down payment in Canada, compared with 55-mo in Q1 2020.
in the Toronto region, it takes 277-mo to save for a down payment, while the same in Hamilton is 63; Vancouver is 317; Montreal 37 and Ottawa 39.
Parents taking out reverse mortgages for down-payment gifts occurred mostly in pricey Vancouver, but now it is common across the country.