In recent years, discussions surrounding housing affordability and accessibility for younger Canadians have gained momentum. The prominence of parental wealth in shaping the home ownership aspirations of the younger generation has become a focal point of inquiry. This phenomenon, often referred to as the “Bank of Mom and Dad,” not only raises concerns about perpetuating inequalities but also underscores the potential for a significant intergenerational wealth transfer. In light of these dynamics, Statistics Canada has undertaken a comprehensive examination of intergenerational housing outcomes, shedding light on the intricate relationship between parental wealth and the housing market experiences of millennials and Generation Zers.
The latest research endeavor, titled “Intergenerational housing outcomes in Canada: Parents’ housing wealth, adult children’s property values and parent–child co-ownership,” delves into the nuanced dynamics shaping housing ownership among individuals born in the 1990s. Notably, the study unveils that a substantial portion of residential properties (17.3%) owned by individuals from this cohort are co-owned with their parents, indicating a prevalent trend of parental involvement in facilitating housing acquisition.
Geographical disparities further accentuate the influence of parental wealth on housing outcomes, with urban centers such as Toronto, Guelph, Abbotsford–Mission, Vancouver, and Victoria emerging as focal points of intergenerational co-ownership. Within these high-priced markets, the prevalence of co-ownership arrangements underscores the challenges faced by younger Canadians in attaining independent home ownership without parental support.
Crucially, the study underscores the tangible impact of parental housing wealth on the property values of their children. Particularly in cities like Toronto, Kelowna, Vancouver, and Victoria, children of parents situated at the apex of the housing wealth distribution tend to possess properties significantly more valuable than those owned by individuals from less affluent parental backgrounds. This disparity, amounting to a substantial percentage difference in property values, elucidates the enduring influence of parental financial resources on the housing trajectories of the younger generation.
The findings of the research underscore the multifaceted influence of parental wealth on intergenerational housing outcomes. Not only does parental property ownership significantly enhance children’s prospects of entering the housing market, but it also exerts a profound impact on the value of the properties they acquire. Consequently, the ability to accumulate home equity and financial assets is intricately linked to the socio-economic position inherited from one’s parents.
As Canada grapples with the challenge of fostering equitable access to housing, addressing the implications of intergenerational wealth transfer emerges as a pressing imperative.