Younger buyers could use family support to break into a competitive housing market
The anticipated transfer of $1 trillion in wealth from aging Canadians to younger generations could drive demand in Calgary’s resale housing market as early as the upcoming spring season, according to local realtors.
As families pass on inheritances, young buyers are expected to use these funds for down payments. A $200,000 inheritance could cover nearly 32% of the average single-family home price in Calgary, estimated at $631,527, according to a Zoocasa report.
While the Calgary Real Estate Board (CREB) reported a higher average home price of $796,970 as of November, a $200,000 inheritance would still cover 25% of the down payment. Monthly mortgage payments on these homes could range between $2,268 and $3,136, depending on the purchase price.
“I can see how this could be huge for those looking to jump into the housing market in the next few months,” said Mark Neustaedter, an eXp Realty real estate agent in Calgary.
Calgary’s housing market remains more affordable compared to urban Ontario markets. For example, in Hamilton, the same $200,000 inheritance would cover only 22% of the average home price of over $901,000, with monthly mortgage payments reaching $3,700.
Toronto and Vancouver, with average single-family home prices exceeding $1.2 million and $2 million respectively, were excluded from Zoocasa’s comparison due to their extreme costs.
When it comes to condominiums, Calgary continues to offer value. Zoocasa found that the average condo price in Calgary is $341,700, with monthly mortgage payments of $745—significantly lower than the average rent of $1,750 for a one-bedroom unit. In contrast, Toronto condo buyers face monthly mortgage payments of $2,739, exceeding average rents by $339.
“It is getting harder for first-time home buyers to afford anything more than an apartment or townhouse,” said Tim Jones, an associate broker with Re/Max Complete Realty. “A cash infusion from family is becoming more normalized for the average young couple buying a detached home.”
Read next: Housing costs over $1,749 are unaffordable for most Canadians
The combination of wealth transfers, declining mortgage rates, and new lending policies is expected to create favourable conditions for Calgary’s real estate market, particularly for detached homes. The federal government’s extension of mortgage amortizations from 25 to 30 years for first-time buyers is also likely to ease affordability pressures.
“You combine all these, and we could see another buying frenzy in the spring,” eXp Realty agent Mark Neustaedter told the Calgary Herald.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
