Parents aren’t just helping their kids buy homes — they’re helping pay rent: poll
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The poll showed 35 per cent of respondents saying they had helped their adult children with the growing cost of rent.
Similarly, more than a third of parents with kids under 18 years old (36 per cent) indicated that they intend on helping their children pay the rent.
The findings come in the wake of, a study on housing affordability found that minimum wage workers would need to work much longer hours to afford a decent two-bedroom apartment.
The Canadian Centre for Policy Alternatives (CCPA) study found that minimum wage earners in Vancouver, for instance, would need to work 112 hours a week for an average two-bedroom.
The findings didn’t surprise Benjamin Tal, deputy chief economist at CIBC World Markets Inc.
“Rent is extremely expensive, and we see parents helping,” he said Monday. “The first way was parents helping with kids buying a house. We see a record high number of young people relying on their parents for a down payment.”
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The housing affordability survey polled 1,557 Canadians online between April 26 and 29.
Almost half (48 per cent) of respondents with children under 18 indicated that they plan on helping their kids buy their first home. A quarter (24 per cent) of those with adult children indicated that they had already helped their kids become first-time homebuyers.
Kelley Keehn, a personal finance educator and FP Canada’s consumer advocate, said the poll illustrates what she hears from people anecdotally.
“The parents are saying, well, maybe we should just help them buy a place then,” Keehn said.
“I hear a lot of stories in Toronto especially where maybe someone’s renting and they get booted out because of an Airbnb or something of that sort, and the parent is feeling uncomfortable with that for their child and just says, ‘Hey forget it, let’s just help you buy.’”
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Tal called this trend “the biggest contribution of one generation to another ever” in terms of financial assistance.
“Clearly we’re seeing a significant number of young people getting help from their parents,” Tal said.
“We have to remember, over the next 10 years, we will see the largest transfer of money ever in Canadian history,” he added.
That worries him because, he said, Canada has “a significant income gap.”
“This kind of situation is actually widening the income gap,” Tal said.
“Which means that we are actually transferring the income gap into the other generation through the housing market.”
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Tal said that more purpose-built rental apartment buildings are needed, because right now the “rental market is the condo market,” especially in big cities like Toronto and Vancouver.
“When I say purpose-built, I mean that it must be apartment buildings as opposed to condos. The condo space cannot be the solution for the affordability crisis we are facing.”
An online survey of 1,557 Canadians was completed between April 26-29, 2019, using Leger’s online panel. The margin of error for this study was +/-2.5%, 19 times out of 20. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. Leger claims to have “stringent quality assurance measures” that allow it to achieve “high-quality standards.” Leger’s methods exceed standards set by the World Association for Public Opinion Research (WAPOR), it said.
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