Kids Received more than $10B to Buy Homes

By: Team Beauchesne

Kids Received more than $10B to Buy Homes


Parents gave their adult kids more than $10-billion to buy houses in the past year

The Canadian housing market’s secret sauce is parents helping first-time buyers with down payments.

According to a report due to be issued Monday by CIBC Economics, parents gave their kids just more than $10-billion in down-payment help over the past year, which was 10 per cent of total down payments over that period. Just less than 30 per cent of first-time buyers got this help, which averaged $82,000.

The CIBC report is one of the first attempts to dig into the impact that parental gifts are having on a housing market where prices have surged higher for more than a decade.

Low interest rates, immigration and ... a drive to own homes have mostly fuelled the housing market. Parental money is a final ingredient – the secret sauce.

“Given the trend and the size of gifting, it is clear that this phenomenon is becoming an important factor impacting housing demand and therefore home prices in Canada,” Benjamin Tal, deputy chief economist at CIBC World Markets, wrote in the report.

The cost of these gifts is a widening wealth gap between young adults who receive financial help for a down payment and those who don’t. Mr. Tal writes that these gifts can make the difference between owning and not owning a house, and thus being able to participate in future home price gains.

“Furthermore, gifting also works to reduce the size of the mortgage and therefore leads to significant savings on interest payments over time,” he wrote.

Mr. Tal says parental down-payment gifts are not a new phenomenon. Close to 20 per cent of first-time buyers received this help in 2015, when the average amount was just more than $52,000.

But the sense of urgency parents feel about helping their kids buy a house seems to be intensifying. Mr. Tal’s report says the average gift has grown in size by an average annual 9.7 per cent since 2015 – two percentage points faster than the pace of home price growth. The importance of this money is underscored by the fact that it was the primary source of down-payment money for two-thirds of first-time buyers who received a gift.

Parents in the country’s two most expensive housing markets were particularly generous. CIBC numbers show the average gift in Toronto during the first three quarters of 2021 was more than $130,000 for first-time buyers, while move-up buyers received an average of close to $200,000. Vancouver parents who helped their kids buy a first home gave an average $180,000, while move-up buyers got $340,000 on average.

For more information about our local housing market, please contact Team Beauchesne:

Diane Beauchesne, Realtor / Team Leader

(705) 734-5589 |