Statistics Canada's recent study, "Intergenerational Housing Outcomes in Canada, Parents and Co-ownership," sheds light on a growing trend: Canadians relying on their parents to enter the housing market. This follows a 2021 study by the same agency that found young adults with homeowner parents were twice as likely to own a home themselves.
The new study explores how this "Bank of Mom and Dad" phenomenon is playing out. It reveals a significant rise in co-ownership arrangements between young adults and parents (or other adults) to afford a home. A staggering 60% of young adults now have some form of co-ownership agreement.
Hot Markets, Hotter Family Ties?
The study highlights regional disparities. Ontario and British Columbia have the highest rates of parent-child co-ownership, at 20% and 20.5% respectively. Within these provinces, Toronto and Vancouver lead the pack at 27% and 24%. This strong correlation between co-ownership and high housing prices suggests that parental help is increasingly necessary for young Canadians to enter these top markets.
The study also found a higher co-ownership rate among immigrants and their children. In the Greater Toronto Area (GTA) in 2021, a remarkable 80.9% of co-owning parents were immigrants.
Wealth Gap Widens in Real Estate
The research concludes that higher parental wealth and homeownership translate to greater housing value for adult children. For instance, in Ontario, a young adult's home value was 31.2% higher, on average, if their parent owned a top-tier value home – regardless of co-ownership. This indicates a growing reliance on parental wealth among young Canadians.
A Cause for Concern: These findings align with a CIBC study revealing that over 30% of Canadians borrow from their family for their first home.
Source: Statistics Canada
