Boomers fuelling real estate by acting as 'Bank of Mom and Dad': Report
While millennials struggle to gain a toehold in some of Canada’s priciest real estate markets, baby boomers who have profited from rising property prices are demonstrating a desire to give the next generation a helping hand.
A new survey released on Tuesday by Sotheby’s International Realty and Mustel Group shows six in 10 (61 per cent) urban baby boomers living in Toronto, Vancouver, Calgary, and Montreal say their investments in real estate have fared better than other investments. And despite a wave of measures by various levels of government and among regulators, almost half (47 per cent) of urban baby boomers expect more outperformance in the next half-decade.
And that confidence is translating into so-called living inheritances to facilitate home ownership for next-generation family members.
“Baby boomers affect the Canadian real estate market on multiple levels: as direct consumers who drive housing demand and product mix, as arbiters of market confidence, and as indirect influencers through their financial support of next generation home buyers,” Brad Henderson, president and CEO of Sotheby’s International Realty Canada, said in a release.
Here are some of the highlights from the survey:
- 74 per cent of urban baby boomers recommend buying a home in their city
- One-third of boomers have already, or intend to, provide a living inheritance to help with a future home purchase
- Calgarian baby boomers are most likely to provide a living inheritance to help with a home purchase
- The median age range for beneficiaries of living inheritances is 30-34
- The median range of living inheritance for the purpose of buying a home is $25,000-$50,000
- 60 per cent of givers attach a trigger to the release of funds, including 17 per cent who cite the sale of their own home as the catalyst