More than a third of homebuyers in the GTA were given a lump sum payment from parents or relatives to purchase their first property and nearly 75 per cent of first-time homebuyers in the GTA worried that their down payment would not be enough, according to a new survey by Royal LePage.
The survey results, which were released Thursday, looked at key trends among first-time homebuyers who bought a residence within the last two years.
"The biggest hurdle first-time homebuyers face is coming up with a substantial down payment. Using the 'bank of mom and dad' for a top-up on a down payment is not uncommon; buyers often receive a comfortable five-figure sum towards their first home from family,” Tom Storey, a sales representative for Royal LePage Signature Realty, said in a written statement.
He noted that first-time buyers in the GTA are often dual-income couples in their thirties.
“The age of the average buyer in the region has increased over time, as affordability barriers continue to force buyer hopefuls to postpone their purchase plans,” Storey said.
According to the survey, 36 per cent of first-time homebuyers in the GTA say they received a lump sum payment from parents or relatives to purchase a home. About 29 per cent said they received financial help with their monthly mortgage payments.
Forty-four per cent of first-time homebuyers in the GTA said the financial assistance they received was a gift.
About 29 per cent of first-time homebuyers in the GTA said they purchased a home in a different neighbourhood or region than they had originally planned due to affordability issues and 37 per cent said they purchased a smaller home than they had planned.
"Canadians continue to face challenges in entering the real estate market, be it high interest rates, strict mortgage qualification standards, or difficulty saving enough money in a reasonable time period for a down payment," Phil Soper, president and CEO of Royal LePage, said in a written statement.
"Still, they continue to prioritize home ownership, and view it as a milestone worth achieving."
Storey said most buyers surveyed were prepared to settle for what they could afford in order to get into the market.
“If their down payment will not get them into their dream home, most buyers are prepared to settle for a smaller property or a condo in order to build equity towards an eventual move-up home,” he said.
According to the Toronto Regional Real Estate Board, the average price of a home in the GTA reached $1,196,101 in May, up from $1,153,269 one month earlier.
