So, CIBC Capital Markets conducted a study and reported that Canadian parents gave their children a total of $10 billion for down payments over the past year. One in three first-time homebuyers received help from their parents to buy homes in the past 12 months in Canada.
The average gifted amount in Vancouver was $180,000. Parents have also been helping their children move into larger homes. These gifts were reported at $340,000 for Vancouver mover-uppers!
Some parents will take on debt themselves to help their children gain their “start” while many others had savings grow during the pandemic.
Wealth inequality can make the difference between owning and not owning a home. Additionally, children that receive help potentially will benefit from future home appreciation. Larger down payments also reduce the size of the mortgage which will significantly reduce interest as well.
All while The Bank of Canada announced this week that the rate at 0.25% is here to stay. This means that there will be no change to anyone with a variable mortgage rate. But for how long still remains the big question. Inflation continues to put pressure on The Bank.
Quite frankly, the findings of this study come at no surprise. This sounds to me like there is no better time to buy than the present for anyone in the market!!
Stats taken from the CIBC Capital Markets and Bank of Canada
Photo by Les Anderson on Unsplash