First-time home buyers in Canada are increasingly turning to their parents for financial help, according to a new survey from the Bank of Montreal.
The BMO 2015 Home Buying Report, released Thursday, suggests a full 42 per cent of first-time buyers are expecting assistance from the “Bank of Mom and Dad.”
That’s up 12 percentage points over last year.
First-time buyers are budgeting an average of $312,700 for their purchase, the survey found, and they anticipate getting an average of $37,500 from family.
“Whether buying a first home or moving onto another home, we’re seeing more and more buyers embark on the journey with help from family,” Martin Nel, BMO vice-president of personal banking products said in a statement.
“It’s important for both buyers and their family to discuss their budget and the expectation for financial help. Creating a detailed savings plan and building an after-purchase budget can help determine what is truly affordable.”
According to the report, 42 per cent of current homeowners looking to upsize also expect help from their parents – much more, in fact, at an average of $94,780.
The help appears to be crucial to many of them, too. Half of upsizers and 40 per cent of first-time buyers told BMO they wouldn’t be able to afford their purchase without their family’s contribution.
This year’s survey also found a sharp increase in the number of first-time buyers willing to engage in a bidding war. Nearly half of those polled said they would, compared to 35 per cent last year.
Only 36 per cent of upsizers said they’d be willing to enter a bidding war in their search for a better home.
The online survey was conducted by Pollara on behalf of BMO, and polled a random sample of 2,007 Canadian adults from Feb. 24 to March 5. A survey of that size has a margin of error of plus or minus 2.2 per cent, 19 times out of20.
