Over a Third of Home Buyers in Ontario Receive Help From Relatives for Their Down Payment

According to a CIBC report, over one-third of first-time homebuyers in Ontario receive help with their down payment, with the average gift exceeding $100,000 CAD.

CIBC economists Benjamin Tal and Katherine Judge indicated in their report released on Tuesday that about 36% of first-time homebuyers in the province use gift money to cover all or part of their down payment. This is 5% higher than the national average and significantly more than the 2021 study, where only 31% of first-time buyers in Ontario received such gifts.

The bank also reported that the average gift for first-time homebuyers in Ontario now reaches $128,000 CAD, second only to British Columbia, where it is $204,000 CAD. In Ontario, this figure has increased by 52% over the past five years, while in British Columbia, it has risen by 90%.

The report highlights that this phenomenon helps mitigate the impact of inflation on housing for buyers but at the same time contributes to the growing wealth gap in Canada.

“Homebuyers relying on a wealth transfer from their parents in order to purchase a home is becoming the norm,” noted the CIBC report, especially in the country's most expensive real estate markets.

The average home price in Toronto in May was $1,165,691 CAD, representing a 2.5% decrease compared to the same period last year. However, high interest rates have increased borrowing costs and worsened housing affordability.