RBC survey shows that parents are less likely to help kids buy a home despite price drops
Falling prices in the Canadian housing market may have been just the news would-be first-time buyers wanted, but there’s a problem.
Those who were relying on their parents to help them out with the down payment are finding that it’s not just Canada’s largest lenders that have tightened lending criteria – the Bank of Mom and Dad has too!
RBC’s annual Home Ownership Poll reveals that 53% of parents and other close family members, concerned about possible deterioration in their own finances are now less willing to help their children or other relatives to get on the property ladder.
Just 22% would give an immediate family member or their childmoney for a new home, a 4-point decline from last year, and almost half said they would prefer to help family or children save money by letting them live with them rather than helping them financially.
On the plus side, those who would be prepared to help are digging deeper with an average $68,000 in support, up almost $10K from last year.
More than two thirds of pre-first-time-buyers believe that lower home prices will finally allow them to buy a home despite higher interest rates.
Market optimism
The report also shows increased optimism in home-buying ambitions.
Four in ten respondents expect to pay less now for a home than a year ago and the share who say it is a seller’s market has almost halved in the past year (from 71% to 37%).
“There has been a big shift in Canadians’ sentiment around the housing market, including an increase in uncertainty around where the market is today,” says Nick Palucci, Senior Director, Home Equity Financing, RBC. “But spring is typically a busy home buying season and many potential home buyers may be seeing a window of opportunity opening for them.”
While sentiment is higher, there is also widespread concern about a recession (75% are worried about this) and that is delaying homebuying for more than a quarter of survey participants.
