As young Canadians continue to grapple with property prices that spiked during the pandemic, a new survey has found first-time buyers are getting more help than ever from their parents.
Almost a third of first-home buyers have already received financial assistance from family members this year, according to a survey by the Canadian Imperial Bank of Commerce (CIBC).
CIBC says 31% of those receiving help compares with 20% in 2015. The amount of money loaned or given has increased 73% compared with five years ago. Young buyers now receive an average $115,000 of assistance.
Young upgraders are also getting a helping hand. Some 12% received family money to buy a larger home. Their average gift or loan was $167,000.
The CIBC report says: “Given the surge in home prices, it’s not surprising gift amounts have risen sharply.”
Although prices are flat generally, home values will likely accelerate in the next few months as the Bank of Canada (BoC) builds on its recent decision to cut the 5% interest rate to 4.75%.
If the BoC follows through on its outlined intention to continue with a program of 0.25% decreases, values will likely increase.
One leading real estate agency has even predicted a 10% rise by the end of the year – a significant turnaround given the difficult market conditions since 2021-22.
For first-time buyers, here are some money-saving tips:
- Track expenses: Analyse your spending to identify areas where you can cut back.
- Savings goal: Determine how much you need for a downpayment and create a monthly savings target.
- Automate savings: Set up automatic transfers to your savings account to make saving effortless.
- Reduce costs: Consider downsizing your rental to free up cash for your deposit. Alternatively, get a roommate to share housing costs. You could even move back in with your parents as that’s a significant money-saver.
- Cut credit cards: Stop accumulating high-interest debt. Credit card costs can derail your goals.
- Increase income: Consider freelancing or creating a side hustle. Or perhaps you could ask your boss for a raise.
- Reduce discretionary spending: Avoid eating out and focus on low-cost activities, such as hiking or visiting parks.
- Audit subscriptions: Evaluate the money you’re spending on online subscriptions.