"Whether buying a first home or moving onto another home, we're seeing more and more buyers embark on the journey with help from family," said Martin Nel, Vice President of Personal Banking Products, BMO Bank of Montreal in an official release. "It's important for both buyers and their family to discuss their budget and the expectation for financial help. Creating a detailed savings plan and building an after-purchase budget can help determine what is truly affordable."
According to BMO’s 2015 Home Buying Report 42 per cent of current homeowners planning to upsize expect financial help from family.
And 42 per cent of first-time homebuyers plan on receiving financial assistance from parents.
"The increase in competition from a growing number of Millennial buyers is helping to push up prices in some major markets, leading some first timers to rely on financial support to help them enter the market," Robert Kavcic, Senior Economist, BMO Capital Markets said.
According to the release, the bank also found:
- Buyers looking to upsize plan to spend $473,900, while first-time buyers' budgets have decreased slightly to $312,700 - down from $316,100 in 2014
- Upsizers plan to put down 26 per cent, or $123,214, as a down payment, while first-time buyers plan to put down 19 per cent, or $59,413
- First-time buyers who are depending on family help expect family to pay an average of 12 per cent of the average cost of a home towards their purchase; current home owners looking to upsize who are depending on family help expect family to pay an average of 20 per cent of the average cost of the home
- 50 per cent of upsizers and 40 percent first timers who are depending on this help say they would not be able to afford a home without this financial help from family
When it comes to repeat buyers, brokers may increasingly have to start advising their parents as well, according to recently released data.