Parental help supports – and may even be a factor in the boom of – purchases by young homeowners, according to a report by Andrea Hopkins for Reuters Canada.
The facts show an obvious trend. Fifty per cent of the home acquisitions made through Bolsey Real Estate in Toronto are financed by parents of the new buyers. Another 75 percent of the clients of Vancouver-based
mortgage broker Jackie Cunningham admits that their fathers and/or mothers give them money for their first down payment.
In a 2013 survey conducted by the Bank of Montreal, 27 percent of the respondents who are composed of first-time homeowners expects their parents or other family members to help them with their housing plans.
Laura Parsons, a mother who helped one son pay for his house and is now supporting her daughter to do the same, probably speaks for her peers when she outlines the reason for her help: “We have more money than we ever thought we would, we have two incomes, we're saving, so I’m going to help.” Canadian housing prices have increased by 10 percent as of last year – one reason for this continued assistance from the home front.
Experts who have analyzed this trtend say that the economy might slow down by lesser consumption caused by baby boomers spending less to help their kids. On the other hand, this arrangement can become a financial cushion during trying economic times.
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