The Bank of Mom and Dad isn’t just financing an increasing number of home purchases as affordability issues persist in Canada’s major cities.
A substantial fraction of the Canadian population is getting help from parents just to cover rent costs, a new survey commissioned by FP Canada suggests.
Some 35 per cent of parents who have children aged 19 and up say they’ve helped them pay rent, and 36 per cent of parents with children under 18 expect to do the same in the future.
While the number may surprise established homeowners, those looking for apartments in big Canadian cities are likely familiar with rental affordability challenges.
In central Toronto, the average asking rent for a one-bedroom unit is $2,266, according to a monthly report from rentals.ca. In Vancouver, landlords are asking an average of $1,990 for a comparable unit.
Even in Calgary, where the housing market is depressed, the average rent is well north of $1,000 per month. In June, the one-bedroom average was $1,390, according to the rentals.ca report.
“With house prices at unprecedented levels in many regions of the country, it’s nearly impossible for many young Canadians to get into the market without assistance from their parents,” says Kelley Keehn, consumer advocate for FP Canada, in a statement included with the survey results.
Pollsters at Leger, which carried out the survey, also touched on homeownership.
Among parents whose kids aren’t yet 18, 48 per cent say they plan to give them a hand with their first home purchase.
Meantime, 24 per cent with children 19 and up say they’ve already done so.
Keehn notes the strain high home prices create for Canadian families.
“That’s putting pressure on parents to take drastic steps to help their children buy a home, including tapping into their retirement savings or their own home equity,” says Keehn.