A new study reports that about 10 per cent of first-time homebuyers in Canada are expecting to receive a financial gift of $100,000 or more to help with the purchase of real estate.
In Ontario, this number is slightly higher at 13 per cent, according to Colleen Hamilton, a spokesperson at Bank of Montreal, which released the study Tuesday.
Almost half (42 per cent) of first-time homebuyers in the country believe the housing market is affordable, says the study, conducted by Pollara Strategic Insights. But with rising household debt and interest rates, many say they’ll be looking to family and friends for financial help.
More than one-quarter of Canadians are seeking a financial gift between $5,000 and $50,000 to purchase a new home, says the study, which surveyed 801 Canadians looking to buy their first home in the next 12 months.
On average, Canadian millennials (born between 1980 and 1994) are looking for more help than their Generation X predecessors (born between 1965 and 1979). According to the study, Canadian millennials are seeking around $61,431 in financial help, almost $20,000 more than those from Generation X.
“Parents and family members are being asked to help first-time buyers enter the real-estate market,” said Hassan Pirnia, head of personal lending and home financing products for BMO.
“It comes down to ensuring that the homebuyer can sustain the costs of home ownership on their own.”
The study also reports those in Ontario and B.C. are less likely to see the housing market as affordable, with only 32 per cent of first-time buyers in Ontario believing the market to be affordable.
In general, first-time buyers in Ontario and B.C. are planning to pay at least $100,000 more than their counterparts in Atlantic Canada — a region which expects to pay the lowest average prices — around $443,705 for Ontarians and $445,294 for those in B.C.
Earlier this month, Toronto came 12th in a ranking of the world’s most expensive places to live. Vancouver placed fourth, according to the report by CBRE Residential that analyzed housing and rental prices for 35 major cities.
The BMO report also found more Canadian millennials are generally living rent free at home while they save for a down payment, and just over a third (36 per cent) of Canadians plan on sharing the financial responsibility of home-buying with someone else.
“While not every Canadian sees the market as affordable, it’s clear that home ownership is still the goal,” Pirnia said.
A press release by BMO summarizing the report’s findings classified six out of 11 larger Canadian cities as buyer’s markets: Calgary, Edmonton, Saskatoon, Regina, Vancouver and Victoria.