A report released on Tuesday by BMO says first-time homebuyers across the country increasingly look for help from friends and family when purchasing a home due to household debt and higher interest rates.
The report, conducted by Pollara Strategic Insights, found:
- Over one-quarter of Canadians are looking for a financial gift between $5,000 and $50,000. On average, millennials look for more help than their generation X cohorts ($61,431 and $43,400, respectively).
- Over 10 per cent of first-time buyers are looking for a financial gift of $100,000 or more.
- More millennials are living rent free at home while trying to save for a down payment. Overall, a third (36 per cent) of Canadians plan to share the financial responsibility with someone else to help with affordability.
“Up against external headwinds, parents and family members are being asked to help first-time buyers enter the real estate market. While a financial gift can help, a home financing solution that fits a homebuyer’s budget is equally important,” said Hassan Pirnia, head of personal lending and home financing products at BMO Bank of Montreal, in a news release.
“It comes down to ensuring that the homebuyer can sustain the costs of homeownership on their own. What can help is coming in to speak with a mortgage specialist – they will assist new homebuyers navigate through the various home financing options and, together, come up with a plan that fits their financial situation.”
According to the report:
- Close to half of first-time homebuyers believe the housing market is affordable but this view varies from province to province.
- For Canadians looking to purchase in the next 12 months, 42 per cent consider the housing market to be affordable.
- First-time buyers in Atlantic Canada are the most likely to see the market as affordable (62 per cent) and are followed closely behind by those in Alberta (58 per cent). Ontario and British Columbia aren’t sharing the same outlook. Only 32 per cent of first-time buyers in Ontario and 34 per cent of buyers in British Columbia believed their markets to be affordable.
“While not every Canadian sees the market as affordable, it’s clear that home ownership is still the goal,” said Pirnia. “We generally expect that Canadians will get a bit of reprieve from rising rates, so the market for first-time buyers is more favourable.”
According to BMO Economics, six out of 11 of Canada’s larger cities are currently buyers’ markets for residential real estate: Calgary, Edmonton, Saskatoon, Regina, Vancouver, and Victoria.
– Mario Toneguzzi