Are baby boomers skewing housing prices?
There's been a lot of talk in the media lately about the 'bank of Mom and Dad effect' on the Canadian housing market. CMHC has recently launched a study to determine how much this phenomenon is affecting the real estate market. A few experts have argued that gifted down payments from parents have allowed many millennials to buy into the housing market when they otherwise wouldn't qualify. Others argue that providing financial assistance to children so they can buy their first home is a right of passage. They also argue that they are helping their children attain financial freedom by investing in the housing market sooner than they could afford on their own.
There's no question that there is a large prevalence of gifted down payments and financial support from baby boomer parents to their millennial children. The question is whether this support will help or hinder their children in the future and the housing market as well.
Listen to an episode of CBC's 'The Current' investigating this topic here: http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2460688638