‘Bank of Mom and Dad’: StatCan report shows home ownership runs in the family

If your parents are homeowners, you’re twice as likely to own a home as those without a generational stake in the housing market, according to a new Statistics Canada analysis on the impact of the “Bank of Mom and Dad.”

The agency’s report released Monday looked at home ownership rates among those born in the 1990s and compared cohorts of parents who were owners and those who weren’t. Overall, Canadians born in this decade had a home ownership rate of 15.5 per cent, though those rates rise the older the person in the cohort.

Within this group, StatCan found that the adult children of non-homeowners had a home ownership rate of 8.1 per cent as of 2021. But for those whose parents were homeowners, the ownership rate rose to 17.4 per cent.

If a parent owned multiple properties, the odds of their children owning a home rose to 23.1 per cent — nearly triple the odds of kids without home-owning parents.

The StatCan report did not consider whether financial gifts were part of the adult children buying a home, but did cite separate studies about the growing prominence of intergenerational wealth transfer helping to fund home purchases.

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The report also found that income played a significant role for those included in the study: non-owners reported an average income of $36,000, compared with $65,000 among those owning property. But StatCan also found a correlation between parents who owned one or more properties and the relatively higher income among their children.

StatCan found that the degree to which having a home-owning parent made a difference to adult children owning as well was the greatest in Ontario and British Columbia — Canada’s most expensive housing markets.

“This may signal that in housing markets with higher property values, where higher incomes are necessary for ownership, parents’ property ownership or wealth plays a larger role in their adult children’s homeownership outcomes,” the report read.

“Inequality of homeownership appears to be reproduced across generations as parents’ property ownership conveys significant financial advantages to their children.”

Home ownership — and the role of parents’ wealth in affording it — is hotly debated today as Canadians struggle to save for and purchase a home amid the rising cost of living.

Housing Minister Sean Fraser said Monday that while many Canadians can have productive lives without owning a home, those who do choose to enter the ownership market shouldn’t be limited by their parents’ real estate portfolios.

“One of the things that’s essential to me is your ability to succeed in Canada shouldn’t depend on how much money is in your parents’ bank account,” he told reporters in the House of Commons.

Finance Minister Chrystia Freeland said last year that housing unaffordability is a reflection of “intergenerational injustice.”

The Liberal government has since rolled out measures such as a new tax-free account to save for the purchase of a first home and efforts to boost the available housing stock to address housing affordability concerns.

Some 250,000 Canadians have so far opened a first-home savings account as of Oct. 5, according to Finance Canada, which Fraser said Monday will “help them get over that first hump of a down payment more quickly.”

The Liberals will present the federal government’s fall economic statement on Tuesday, with Freeland suggesting housing and affordability will be key themes in the fiscal update.

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