Approximately 40 per cent of the parents of younger homeowners in Ontario say that they helped their children financially with their purchase, with the average gift exceeding $70,000.
A new Abacus Data poll commissioned by the Ontario Real Estate Association has found that 41 per cent of the parents of children aged 18 to 38 who own their homes helped finance that purchase, some to the tune of tens of thousands of dollars.
In fact, the poll of 2,000 Ontario adults found that among those who provided financial assistance the vast majority (72 per cent) gifted money to help with the down payment, with the average value of those gifts totalling $73,605.
Among those who only provided a loan for the down payment, the average contribution was $40,878.
Meanwhile, 38 per cent of parents who helped financially with a house purchase said that they help their children pay their mortgage payments, suggesting that a not insignificant number of younger homeowners would struggle to pay their bills without assistance.
“Parents are becoming increasingly worried that their children may not be able to achieve the dream of home ownership, so they are pulling out all the stops to help them get their foot in the market,” OREA CEO Tim Hudak said in a press release accompanying the poll results.
“We are in a housing affordability crisis being driven by severe lack of supply, and increased demand, especially around ‘missing middle’ type properties. Without meaningful action at all levels of government, Ontario’s millennials and young families will be forced to look outside the province for their first home, leading to brain drain and negatively impacting our economic competitiveness.”
Over the last year the average price of a GTA home across all property types rose by 29 per cent and now stands at $1.2 million.
The Toronto Region Real Estate Board has said that it expects prices to keep rising in 2022, even as an expected rise in interest rates makes for higher borrowing costs.
The poll commissioned by the OREA found that about 71 per cent of non-homeowners still aspire to purchase residential real estate.
But of those individuals more than half (55 per cent) said that they were pessimistic about buying a home in a community they actually want to live in.
About 60 per cent of respondents also said that their community has already been impacted by people moving out of large centres in search of more affordable housing.
In the release, Hudak said that the poll results are “not surprising” given the supply challenges that exist.
“To bring affordability home for young Ontarians, we need to be continually increase housing supply and choice in the market, across the province,” he said.
The poll was conducted between January 20-25 and is considered accurate to within 2.17 percentage points, 19 times out of 20.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
