More than a third of millennial homeowners hit their parents up to pay costs: HSBC survey
The vast majority of Canadian millennials in a global survey of over 9,000 adults plan to buy a home soon, but most are nowhere near financially ready to enter the market.
HSBC bank commissioned polling firm Kantar TNS to survey 9,009 people in nine countries: Canada, Australia, China, France, Malaysia, Mexico, the UAE, the United Kingdom and the U.S.
The poll included 1,000 Canadians, but the results released Tuesday reflect the home-buying attitudes globally.
The survey includes some eye-popping numbers about the housing market, particularly among individuals between ages 18 and 35 — the range HSBC defined as millennial for the poll conducted last October and November.
- Real estate ‘chaos’ sends millennials scrambling to buy while they can
- How the ‘bank of mom and dad’ is impacting house prices
A little over a third of Canadian millennials polled already owned their own home, and among those who didn’t, more than four out of five — 82 per cent — intended to buy one in the next five years.
However, nearly three-quarters, or 73 per cent, of millennials who planned to buy soon said they had not yet started saving for a down payment. As well, more than a quarter of those in the 18-35 group said they had not yet made any sort of budget yet.Â
But the numbers also suggest their parents are playing a key role in their homeownership goals.
More than a third of millennials surveyed, or 37 per cent, said they had made a withdrawal from the “bank of mom and dad” to cover housing costs. As well, 21 per cent of them hit up their parents to help them pay for other unexpected costs after they had purchased homes.Â
In addition, 21 per cent said they had moved back in with their parents before buying a home to save for one.
“The reality is, it’s a challenge,” said Larry Tomei, HSBC Canada’s head of retail banking, “so I can’t stress enough the importance of having a good plan that includes getting the right financial services advice and support before and after you buy.”
Going into homeownership with a sound financial plan has become even more integral as the price of the average home in Canada continues to rise.
The latest Canadian Real Estate Association numbers show the typical home was worth $470,297 in January, a 17 per cent increase from a year earlier.
While the HSBC survey has some concerning numbers, not all the conclusions were bleak. Many of the survey subjects said they had realistic expectations for how they planned to pay for their homes — nearly three in five (59 per cent) millennials intending to buy would consider spending less on leisure activities and going out.
Thirty-seven per cent said they would be prepared to buy a smaller-than-ideal place, 32 per cent would consider renting out one of their rooms, and 13 per cent would consider buying real estate with a friend, as opposed to a family member or romantic partner.