In British Columbia's booming real estate market 42 per cent of first-time buyers received family financial aid, support that appears to be behind almost half of home purchasers getting over the key hurdle of a 20 per cent down payment, according to a survey out Tuesday.
At an average sale price of $625,871, according to the British Columbia Real Estate Association, the province has the most expensive homes in the country. Those prices were down 6.4 per cent in December from a year ago amid heavy tax restrictions on foreign ownership transfers in metro Vancouver.
interviewed a thousand people across the country between Sept. 2016 to November 2016 to get a sense of how much support buyers are getting from family and British Columbia was by far the leader in terms of pure dollars.
With what appears to be some family support, the survey found 45 per cent of B.C. buyers were able to put down 20 per cent or more of the purchase price in a down payment. Another 13 per put down five per cent.
Canadians needs at least five per cent down to buy a home with a loan backed by the federal government. They must come up with 10 per cent for any amount between $500,000 to $1 million. The 20 per cent threshold is key because at that point banks can loan money without forcing buyers to get costly mortgage default insurance, under federal rules.
“RateHub is expecting the bank of mom and dad to have a record year in 2017,” the company said, adding regulatory changes in 2016 and rising home prices have made entering the housing market for first-time homebuyers an ongoing challenge.
Quebec, a much cheaper environment for buying houses compared to British Columbia, saw 45 per cent of first-time buyers get financial help while 45 per cent were also able to meet the 20 per cent threshold. In Ontario, 35 per cent of first-time buyers received help from relatives while 38 per cent were able to put down 20 per cent or more on their homes.