Despite looming affordability challenges, families show willingness to support loved ones' home purchases
The COVID-19 pandemic’s financial impact has elicited plenty of soul-searching among Canadian households, especially in terms of how they handle their wealth and health. That includes the path to homeownership, which is looking narrower than ever – though that isn’t stopping Canadian families from chasing the dream.
In a recent poll of approximately 1,000 Canadians, RBC found two thirds (66%) were concerned about how the next generation and their children would be able to afford a home as over half (53%) see greater challenges to affordability in the near future. Six tenths (60%) said housing prices in their region were unaffordable.
But even with that view, a strong majority (81%) shared a belief that homeownership is a good investment. The pandemic has also apparently failed to change Canadians’ minds on the rent-or-buy decision, as only 29% agreed that renting makes more sense than buying at the moment.
“Over the last few years, and throughout the pandemic, it has become harder to enter the market in many cities nationwide, especially when trying to do it alone,” said Amit Sahasrabudhe, vice-president, Home Equity Finance, Products and Acquisitions, RBC.
A stiff housing market isn’t the only thing getting in aspiring homeowners’ way. Nearly half of respondents (47%) were worried their finances would deteriorate over the next year; more than three quarters (76%) had a shared apprehension about COVID-19’s financial impacts, and the same number (76%) said they were trying to limit their spending to cope.
Six tenths (60%) said it was almost impossible to afford rent in their area, and 58% said the same about buying a home on their own. That left just one quarter (24%) of respondents saying they would go it alone when trying to purchase a home.
But a feeling that things are financially tight isn’t stopping Canadians from helping loved ones. A quarter of Canadians polled (25%) said they were having to provide more financial support to their family because of the pandemic; roughly a third (31%) said they’re willing to help their child or an immediate family member pay for a new home. Another 46% expressed a willingness to step in with rent support for a family member or child who asks for it.
All in all, Canadians who said they would be willing to financially support a child or immediate family member’s home purchase said they’d be willing to give $60,513 on average, with just under half (49%) saying the expected to be repaid.
