Increasing numbers dependent on family to secure homeownership

A new Statistics Canada article presenting findings from the 2023 Survey of Financial Security, examines housing affordability and the numbers of Canadians who’ve relied on familial support (inheritances, gifts and loans) to secure an owned home.

In the note, Familial support in entering the Canadian housing market, researchers say owning a home remains a critical source of wealth accumulation with real estate equity representing 42 per cent of overall household wealth in 2023.

The generational benefit of homeownership is also examined. The researchers found that those born in the 1990s were more than twice as likely to own a home if their parents were homeowners. Children whose parents own multiple homes were nearly three times more likely to own a home themselves. Homeowners’ higher resiliency scores are also examined.

“The link between homeownership and wealth creation is even more pronounced for younger families,” they write. “As housing affordability deteriorated, the barriers to homeownership have become increasingly prohibitive, particularly for those without familial support.” 

Inheritances increasingly make up the shortfall 

The research article states that three out of 10 homeowners reported receiving an inheritance at a median value of $67,000 in 2019. By 2023, the median inheritance homeowners had received rose to $85,100.

Across all age cohorts, they add, five per cent of families live in a home that was acquired in part or in full from a gift or inheritance; nine per cent reported that at least some of their downpayment for a home had been from a gift or inheritance.

“When combined with those who borrowed from family and friends rather than a financial institution to purchase their home, the overall share of homeowners who benefitted from an inheritance or other types of familial support to enter the housing market rose to four in 10,” they write.

Those under 35 were twice as likely to report that at least part of their downpayment was a gift.

“Delayed or inaccessible entry into the housing market for those without familial support may contribute to heightened inequality as wealth is transferred from older generations in the coming years,” the report states. “As the likelihood of homeownership becomes more dependent on intrafamily transfers, it may hinder socioeconomic mobility, particularly for those in vulnerable population groups.”