According to BMO’s 2015 Home Buying Report, 42 per cent of first-time home buyers are expecting parents or relatives to help them cover the cost of their first home. This number is up by 12 per cent from last year.
The survey also found that half of those who were upsizing their home and 40 per cent of first-time buyers feel they would not be able to afford a home without their family’s help, while first-time buyers who expect their family’s help say they’d be paying an average of 12 per cent of the cost.
“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,” said the Vice President of Personal Banking Products for BMO Bank of Montreal, Martin Nel. “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.”
Home buyers who are upsizing their homes were looking to spend an average of $473,900, and first-time buyers are planning on spending slightly less than last year: $312,700 on average, down from $316,000.
“The increase in competition from a growing number of Millennial buyers is helping to push up prices in some major markets, leading some first timers to rely on financial support to help them enter the market,” said the Senior Economist for BMO Capital Markets, Robert Kavcic.