More and more first-time buyers are resorting to a donation from their family
Posted at 2:01 a.m.
Updated at 6:00 a.m.
Nearly a third of first-time buyers in Quebec received a financial boost from their family to buy their first property this year. A trend that is increasing, in an increasingly unaffordable real estate market.
In March 2023, Florence Fortin-Houle and Félix Alary purchased a 1,000 square foot condo on the third floor of a building in Villeray, “a dream come true” for the thirty-something.
The newlyweds earn a good living: she as manager of a renowned Montreal restaurant, he as a chef in another high-end establishment. “But if we hadn’t had the help of my parents, we would have had to wait longer before buying,” says Florence Fortin-Houle.
The young woman’s parents gave her almost 20% of the total price of the co-ownership. Without this donation, purchasing this home simply would not have been a smart choice, according to her. “We should surely have taken more out of our pockets, and lost part of our quality of life. »
The case of Florence Fortin-Houle is far from isolated. This year, no less than 31% of first-time buyers in Quebec received a donation for their down payment, according to a 2024 survey by the Canada Mortgage and Housing Corporation (CMHC).
New normal
We can expect to see an increase in this phenomenon in the coming years, according to Karine Casault, economist at the Association of Construction and Housing Professionals of Quebec (APCHQ). “The trend is increasing in the other provinces and is intensifying greatly in Quebec,” she specifies.
Of all Quebec buyers, 27% received a donation to pay their down payment, with an average amount of $49,198, according to CMHC.
This is a marked increase compared to the last two years: in the 2023 survey, this figure stood at 18%, while it stopped at 14% in the 2022 edition.
According to the 2024 survey, most of the amounts received by buyers came from the buyer’s parents (20%), while the remainder came from other family members.
An observation that hardly surprises Florence Fortin-Houle. “The majority of my friends who bought a house had help from their parents […]but it is perhaps linked to my socio-economic status,” comments the woman who says she belongs to the middle class.
Far from being limited to Quebec, this phenomenon is widespread across Canada, where nearly a third (30%) of buyers received financial assistance from their loved ones to pay their down payment, according to CMHC. The increase in this trend is, however, less dazzling on a national scale than in Quebec: in 2023 and 2022, this proportion among Canadian buyers will be 27%.
Sign of the times
This phenomenon is the symptom of an increasingly inaccessible real estate market, according to Karine Casault, according to whom “the unaffordability of housing is at its worst level in 30 years”.
Statistics Canada also observed a historic decline in the property rate in Quebec in the 2021 census, with a drop of 1.4 percentage points. This is a first since this exercise began 50 years ago.
Because faced with a real estate market that is not giving gifts, the average buyer has difficulty accessing property. “To qualify for a new house at the median price, you need an income of $137,657 per household,” explains Karine Casault. However, the median net income of a couple with two children was $119,820 in Quebec in 2021, according to data from the Institute of Statistics of Quebec (ISQ).
It is easy to understand that many borrowers need a donation from their parents.
Karine Casault, economist at the Association of Construction and Housing Professionals of Quebec
Furthermore, 32% of Canadian buyers who received a donation would not have been able to purchase without this help, according to the CMHC survey.
Florence Fortin-Houle emphasizes that being a homeowner is not easy today, with hefty mortgage payments fueled by high interest rates. “But honestly, I consider myself really lucky, I know that not everyone has the chance to access property today,” she adds.
Across Canada
Between provinces, the proportion of Canadian buyers who received a donation to pay their down payment varies greatly. According to CMHC’s 2024 survey, more buyers in Ontario (36%) and British Columbia (40%) said they received a donation. They were fewer in the Atlantic provinces (30%), Quebec (27%) and the Prairies (20%). Donations were highest in British Columbia, with an average amount of $153,649. Ontario came in second place, with an average donation of $80,170.
Consult the 2024 CMHC Mortgage Borrower Survey
