{"id":18982,"date":"2021-12-02T15:15:00","date_gmt":"2021-12-02T23:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=18982"},"modified":"2021-11-24T10:47:15","modified_gmt":"2021-11-24T18:47:15","slug":"wealth-management-family-matters-the-bank-of-mom-dad","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2021\/12\/wealth-management-family-matters-the-bank-of-mom-dad\/","title":{"rendered":"Wealth Management \u2022 Family Matters \u2022 The Bank of Mom &#038; Dad"},"content":{"rendered":"<p style=\"text-align: justify;\">With real estate prices continuing to rise in Canada, having a financial leg up from the Bank of Mom and Dad is a significant advantage in today\u2019s market. For the country\u2019s wealthiest families, parents have been known to give their adult children amounts well into the six-figure range for the purchase of a home, according to new data insights.<\/p>\n<p style=\"text-align: justify;\">In a report published this week, IG Wealth Management revealed that high-net-worth individuals gave an average of $145,000 to each child for the purchase of a property.<\/p>\n<p style=\"text-align: justify;\">The report \u2014 Family Matters : a report on affluent Canadians and the transfer of wealth \u2014 used research from Investor Economics and Pollara Strategic Insights, which gathered online survey information from 510 Canadians who have investable assets of $1 million or more.<\/p>\n<p style=\"text-align: justify;\">\u201cIncreasingly, Canadian families are viewing wealth created by older generations as family assets, and as means to help their children and grandchildren enjoy a more secure financial future,\u201d said Damon Murchison, president and CEO of IG Wealth Management, in a news release accompanying the report.<\/p>\n<p style=\"text-align: justify;\">\u201cHowever, many parents are also concerned about how and when to leave money to the next generation.\u201d<\/p>\n<p style=\"text-align: justify;\">When evaluating the major areas of inter-family gifts, buying a first home ranked second on the list at 72%, one place below education (86%) and above car (52%) and living expenses (51%).<\/p>\n<p style=\"text-align: justify;\">About three out of four HNW individuals surveyed said that they either had acted or were likely to act as the Bank of Mom and Dad. When it came to home buying, few of those surveyed said that they would provide the full amount. However, on average, the funding given by affluent parents was equal to 25% or less of a home\u2019s total purchase price.<\/p>\n<p style=\"text-align: justify;\">The amounts of property-related gifts grew with the level of a family\u2019s wealth or income as well as the location of the family, the report noted. Future parental support for first-time home purchases \u2014 which equaled 26% overall \u2014 was highest in the provinces where property values are the most expensive, 33% in British Columbia and 30% in Ontario.<\/p>\n<p style=\"text-align: justify;\">\u201cWe gave our youngest son $100,000 to buy a house in Vancouver because it\u2019s too damn expensive,\u201d said one anonymous Vancouver interviewee in the report.<\/p>\n<p style=\"text-align: justify;\">After the first home purchase, the desire for parents to provide financial assistance ranked below other types of support. Parental enthusiasm to fund their child\u2019s next home transaction or a vacation property equaled 24% and 10%.<\/p>\n<p style=\"text-align: justify;\">By gender, males were slightly more willing to help with buying a home, with 72% expressing desire to financially assist with first-time property purchases, 28% with the next home and 12% with a vacation property. This is slightly higher than females, 71%, 22% and 4% of whom had the willingness to help with the same types of property transactions.<\/p>\n<p style=\"text-align: justify;\">Using the averages generated through the online survey and the Investor Economics segmentation data, the IG report estimated that the amount that has been given and will likely be given to adult children by affluent families will equal $100 billion in the years ahead.<\/p>\n<p style=\"text-align: justify;\">In a similar report published last month, CIBC found that financial gifting for home purchases amounted to just over $10 billion over the past year, 10% of the total down payments in the market.<\/p>\n<p style=\"text-align: justify;\">Although the share of new buyers receiving financial help did not grow during the pandemic, the In Focus report stated that just under 30% of first-time home buyers had help from family this past year. On average, first-time buyers received $82,000, while mover-uppers were given $128,000.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2021\/11\/rich-canadian-parents-kids-145k-buy-homes.html\" target=\"_blank\" rel=\"noopener\">Rich Canadian Parents are Giving Their Kids $145k to Buy A Homes<\/a> by Michelle McNally | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With real estate prices continuing to rise in Canada, having a financial leg up from the Bank of Mom and Dad is a significant advantage in today\u2019s market. For the &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2021\/12\/wealth-management-family-matters-the-bank-of-mom-dad\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-18982","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Wealth Management \u2022 Family Matters \u2022 The Bank of Mom &amp; Dad &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2021\/12\/wealth-management-family-matters-the-bank-of-mom-dad\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Wealth Management \u2022 Family Matters \u2022 The Bank of Mom &amp; Dad &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"With real estate prices continuing to rise in Canada, having a financial leg up from the Bank of Mom and Dad is a significant advantage in today\u2019s market. 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