A growing proportion of millennial would-be home buyers are relying on their families’ purses to help with their purchases, according to a recent study by the Bank of Montreal.
As reported by Josh O’Kane for The Globe and Mail
, the latest edition of BMO’s annual survey of first-time home buyers revealed that fully 44 per cent of consumers in the 18-35 age bracket are forced to depend on parents or other earning family members for their purchases (either in part or as a whole).
This is a far cry from the results of BMO’s 2013 study, which put this proportion at 28 per cent.
“Research shows it’s an increasing trend,” BMO managing director (personal lending products) Sameh Elrefaei said, adding that the seemingly non-stop growth of prices in Canada’s hottest markets is a major contributing factor in this development.
Furthermore, the 2016 survey found that 42 per cent of young professionals in Canada are facing significant difficulties in finding affordable detached homes.
“When you take affordability into account, a condo is much more accessible,” Elrefaei stated.
Observers said that this is not a new trend, with Mortgage Professionals Canada CEO Paul Taylor saying that parents have long contributed to their children’s first home purchases.
“[It’s] probably a whole lot better to be in a loan arrangement with a family member than a financial institution,” Taylor said, specifically pointing at the far greater possibility of interest-free borrowing from one’s family.