Assistance from parents is playing a bigger role in determining which wishful homeowners can achieve their dreams.
It’s no surprise that having wealthy parents is the ultimate money hack. Parents have often given their kids some money, but these days, they’re handing over even more.
On average, Canadian parents are giving their kids $115,000 to help with a down payment, up 73% from 2019. And it’s not just cash; parents are also signing on the dotted line. Around one in six homes owned by people born in the 1990s were co-owned with their parents. It’s not that big of a surprise, given the increase in home prices in the last couple decades.
Back in the mid-1970s, it took the typical young adult five years of full-time work to save up for a 20% down payment on an average-priced home. Today, it takes 17 years.
While this financial boost is helping many young Canadians become homeowners, it’s also widening the already big wealth gap in Canada. For those without well-off parents, it’s hard to compete as a buyer against someone who has a massive head start.