Despite ongoing financial uncertainty, more than half of Canadians polled by the Royal Bank of Canada said that they would financially support loved ones who are purchasing or renting homes during the COVID-19 pandemic, according to a new report by the bank.
Around 31% poll respondents said they would be willing to help their children or immediate family members pay for a new home, while 46% said they would like to provide such assistance to loved ones who are currently renting. Another 25% said that they have been assisting family members since the pandemic began.
On average, Canadians said they would be willing to provide purchase assistance to the tune of $60,513. Only 49% said they would expect this amount to be paid back.
“Canadians have a lot more to consider when buying a home than they did a year ago, but they don’t have to do it alone,” said Amit Sahasrabudhe, vice president of home equity finance, products, and acquisitions at RBC. “Over the last few years, and throughout the pandemic, it has become harder to enter the market in many cities nationwide… Even during these uncertain times, what we are seeing is that families are continuing to rally around each other and financially support their loved ones as they work towards buying a home.”
This assistance might prove even more important in the next few months, as affordability in Canada is likely to further erode due to inventory shortages in the hottest markets, analyst Steve Lafleur wrote recently for the Toronto Sun.
“Rooting out empty homes might free up some supply. But with job creation surging while housing starts remain fairly constant, crude arithmetic suggests both Toronto and Vancouver need more housing to stave off further declines in affordability,” Lafleur said.
Indeed, 58% of respondents said that it’s impossible to buy a home on their own in the current economic climate, with 60% expressing a similar sentiment about paying rent. Fully 60% said home prices in their areas are unaffordable, while 53% expect affordability to worsen in the near future.