Want to own a home in Canada? Have you tried wealthier parents? Statistics Canada (Stat Can) released a new study exploring the role of parental wealth in obtaining homeownership. They examined tax data to determine the homeownership rate for “adult children” born in the 1990s, in relation to their parent’s wealth. The odds of ownership more than doubled for the children of homeowners, as does data indicating parental assistance to help with first-time buyers. The agency suggests this resembles Canada’s Victorian-era “inheritance culture,” similar to the circumstances immigrants coming to Canada are trying to escape.
Young Adults Are 2x As Likely To Own A Home If Their Parents Do
The study confirms what you already know—homeownership rises with age. About 1 in 3 (33%) of Canadians born in 1990 were homeowners, who were 31 years old at the time of the filing. The rate is cut to less than half (15.4%) for those born just 4 years later (27 years old at the time of filing). Lower rates are expected for younger adults, but it’s already low for the oldest group. The size of the cliff also appears to be unusually large.
More surprising is the gap between those with parents that own at least one home. For young adults with parents that owned at least one home, roughly 1 in 5 (17.4%) were homeowners themselves. The rate is cut to less than half (8.1%) for the children of those that didn’t own a home.
“… a difference of 115%… making them more than twice as likely to own a home,” the agency concludes.
Investing in real estate appears to run in the family. Nearly 1 in 4 (23.4%) children that owned had parents that owned more than one home. Of those, over half (52.8%) of the children owned multiple properties themselves.
Canada Is Moving Towards An “Inheritance Culture”
The study explains the data reinforces Douglas Todd’s suggestion that housing is pushing Canada into an “inheritance culture.” This is a system where the advantages of parental wealth compound to the point that catching up would have similar odds to winning the lottery.
Applying Thomas Pinketty’s analysis to Canada, Todd warns the reliance on the bank of mom and dad has become problematic for the country. “It might be contributing to Canada returning to the harsh 19th-century system that once dominated Britain, France and Russia, and which still holds back much of the world,” he explains.
Stat Can cites a CIBC study that looked at first-time buyers between 2015 and 2021. Over that period, the share of first time buyers receiving a gift increased 40% to over 1 in 4 (28%). At the same time, the average size of gifts rose 60% to hit $80,000. Remember, this increase was just over 6 years, helping to compound the pressure of rising prices.
Low rates likely amplify the issue further. If the gap is widened by parental wealth—adding credit leverage compounds the advantage. It also adds more risk, turning the problem into a widespread social liability.
While this is something that impacts many countries, it’s particularly problematic for Canada. The country requires immigration for its survival, and lures them with the promise of opportunity.
If Canada suffers from the same inheritance cultures immigrants were trying to flee, where’s the competitive advantage? Especially when Canada is moving towards this culture, while the countries providing most of our population growth are moving away from this model.
