Welcome to our housing newsletter. This week's newsletter is written by Ron Nurwisah, who appreciates the home cooking at the bank of Mom and Dad.
The CMHC released numbers this week showing that nearly one in five first-time homebuyers in Canada got money to help with their downpayments. It's a stat that's not that surprising. "The bank of Mom and Dad" is a phrase that gets thrown around a lot in cities like Vancouver and Toronto, cities that have seen real estate prices balloon over the last few years.
According to a RateHub survey published earlier this year, more than 40% of British Columbians buying a home said they got help from family. A BMO survey also found that almost half of young Canadians expect help from family or their parents when purchasing their first home.
It's not easy for millennials or their parents. There's the stigma of full-grown adults (often those with well-paying jobs) asking for help with a milestone purchase. The average middle class Baby Boomer was probably able to afford their first home comfortably in the 1960s and 1970s. That's not always the case, even for those younger Canadians with well-paying jobs (blame it on the avocado toast, or don't).
There are also larger issues. Not all young Canadians have access to families that can loan them thousands of dollars, locking many hard-working young Canadians out of the property market and leading to a greater stratification in this country's largest cities. Journalist Leah McLaren, in a 2014 feature, also argues that this transfer of wealth from Baby Boomers to the younger generation is helping prop up the market. It also has the potential to add more debt on the shoulders of soon-to-retire boomers and already debt-ladened millennials should the market crash. Nobody wins in that scenario.
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On HuffPost Canada
With Toronto’s housing market showing signs of cooling, and Vancouver’s days of heady price increases now well behind it, a new top dog is emerging in Canada’s real estate market: Montreal. Read the story.
Nearly one in five first-time homebuyers received help with a down payment from a family member, according to a survey conducted by the federal housing agency released Tuesday. Read the story.
StatsCan gets Vancouver home prices very wrong (Better Dwelling)
Meet America's first urbanist (Citylab)
Why Toronto’s foreign buyers tax might have a bigger impact (Buzz Buzz Home)
Are investors fleeing Canada? (Bloomberg)
What to do about Toronto’s falling prices (Globe and Mail)
Cooling Toronto market just a return to normal, realtors say (Toronto Star)
Watch: An homage to IKEA’s blue bag (Dezeen)
"The thing about the bank of Mom and Dad is that once you’ve made one withdrawal, you’ll likely return for another."
— Leah McLaren on the bank of Mom and Dad
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