In four cities—Calgary, Montreal, Toronto, and Vancouver–younger generations looking to become homeowners may have financial barriers to homeownership removed by their well-to-do parents and other adult relatives.
That’s according to the “2017 Generational Trends Report” (http://bit.ly/2zfZebe), released by the Mustel Group/Sotheby’s International Realty Canada this week. It looks at “living inheritances”—the transfer of money to family members so those relatives can buy a home.
The report says, “…this transfer of wealth is opening doors to homes and borrowing options otherwise unavailable to many recipients.”
Given the higher home prices and mortgage rates, over one-third of gift givers believe that without their financial help, their recipients wouldn’t be able to buy a home or get a conventional mortgage.
Some of the report’s other findings:
- One-third of baby boomers in the four cities plan to, or have already given, a living inheritance specifically to help relatives buy a home.
- Sixty percent of living inheritance givers of real estate funds said there was or will be a specific trigger that enables their gift, including the sale of financial investments (21%) and the sale of their primary home (17%).
- The median gift amount in Calgary, Toronto and Vancouver metro areas ranges from $25,000 to $49,999, and $10,000 to $24,999 in Montreal.
- Thirty percent of boomers who are giving money say that beneficiaries buy condos and single-family homes under $350,000, with 28% of purchases costing between $350,000 to under $500,000. Fifteen percent are priced from $500,000 to under $750,000.