Canadians are using family funds to increase down payments for home purchases

A recent survey by Zolo revealed that almost 70% of Canadian home buyers are relying on money from relatives to cover at least part of their down payment. The 2024 Canada Housing Market Report interviewed 800 Canadians who purchased homes in 2023, with 68% using funds from family members for their down payment. Of those, 48% received money from parents or relatives, while 20% used inheritance money.

Additionally, the study found that 35% of buyers opted for co-ownership to pool resources and enter markets they couldn’t afford alone. Joint-ownership comes with risks, as mortgage expert Angela Calla advises buyers to consider long-term implications, such as potential disagreements over selling the property.

Furthermore, the report highlighted that more Canadians are shopping for mortgage lenders, with 34% comparing rates in 2023 compared to 26% in 2022. Thirty-eight percent are turning to mortgage brokers to secure the best interest rates.

Real estate expert Daniel Foch emphasized the importance of making good financial decisions and deferring gratification to eventually achieve their dream home. The trend of using creative strategies to enter the housing market may continue in 2024, depending on the central bank’s interest rate decisions.

Overall, the housing market is evolving, with buyers compromising on must-have features to afford a home. Location, type of home, and square footage were top priorities for buyers, but many compromised on room size, square footage, and home type. As the market shifts, buyers are advised to work with brokers to secure the best rates and make informed decisions.