Canadians likelier to buy home if parents are already homeowners: study

Housing prices often leave people wondering if the dream of owning a home is out of reach.

However, according to a new report by Statistics Canada, some Canadians have an advantage in buying. If your parents are property owners, you are twice as likely to own a home than those whose parents are not homeowners.

The report shows the rate of home ownership in 2021 was about 17 per cent for the adult children of homeowners and only about eight per cent for the adult children of non-homeowners. If your parents owns multiple properties, you are nearly three times more likely to buy a home.

“If you are coming from a family background who are teaching wealth through real estate investment, that knowledge gets passed down to their children,” said Jakie Ng, an Edmonton real estate broker.

While the report stops short of implying a connection between the two trends, it does cite a CIBC study that showed between 2015 and 2021, the number of first-time buyers who benefit from the so-called ‘bank of mom and dad’ — gifts or inheritance — to help with a down payment rose eight per cent.

“You cannot be in a competitive market with a standard job in today’s market.”

–Jakie Ng, Edmonton real estate broker

Ng, the founder of ARIVL Real Estate Company, says qualifying for a home has increasingly become more difficult. Ng believes a standard job won’t be enough for Canadians to buy a home in some cities.

“To access our markets, you are going to need that wealth,” he said. “You’re not going to be a first-time buyer in Vancouver or in Toronto, that can afford this economy.

“Getting into a first-time home, owners in a busy market, you are going to need that competitive advantage, and you are going to need that wealth to help you.”

Barriers to home ownership

Ng says the barriers to qualifying for a home have been increasing quite a bit.

“With the stress tests, the higher demand of requirements from the bank, salary requirements, stuff like that,” he said. “On top of that, rising interest rates have not been kind to a certain market.”

Federal Housing Minister Sean Fraser says Canadians can have productive lives without owning a home. It’s under the current government that housing prices in Canada have ballooned. The minister admits having parents who didn’t own a home shouldn’t stop their children from purchasing a place to live.

“Your ability to succeed in Canada shouldn’t depend on how much money is in your parent’s bank account. It isn’t right, it isn’t fair,” said Fraser.

“It shouldn’t be a barrier to them to access the market, just because their parents never owned a home.”