In Canada, whether parents own property has become the "ticket" for middle-class families to cross social classes, which may directly affect whether their children can afford a house and enter the middle class in the future.

An article in the Financial Post today points out that as the federal election in Canada approaches, housing affordability continues to deteriorate and has become a core concern for Canadian voters. Current political decisions will not only affect the financial status of voters themselves but also profoundly influence their children's future ability to purchase homes.

According to the latest study by Statistics Canada, property ownership is not only about asset accumulation for this generation but also deeply affects whether the next generation can "cross social classes." Data shows that there are obvious differences in the home-buying prospects between children from renting households and those from home-owning households.

Parents with homes vs. parents renting, a big difference in children's futures

Over the past decade, Canadian housing prices have soared, and young people are increasingly relying on "parental support" to buy homes - whether it's gifting the down payment or inheriting the property. Young people from renting households receive far less help than those from home-owning households.

Data from Statistics Canada shows:

  • In 2023, home-owning Canadians received inheritance amounts nearly three times higher than renters.
  • The median inheritance amount for home-owning families exceeded $85,000.
  • Renting families had less than $30,000.
  • More than 40% of homebuyers relied on inheritance or parental assistance to purchase homes.
  • Less than 10% of renters received similar help.

An earlier report pointed out that among children born in the 1990s, if their parents owned a home, their likelihood of owning property was twice that of children from "homeless families."

In other words, buying a home is the "ticket" for middle-class families in Canada to move up in social class.

Who can afford a home is no longer just about individual effort, but the continuation of intergenerational wealth.

"Renting can make you wealthy"? Too idealistic

In recent years, some people have advocated for a "refined rental lifestyle" - such as not having to fix the house, lower rent, and using the remaining money to invest and earn more. It sounds very reasonable, but data from Statistics Canada shows otherwise.

In 2023, 42% of Canadian family wealth came from property, and for younger families, this proportion was closer to 50%.

Wealth accumulation for renters is clearly slower. From 2019 to 2023:

  • The median net worth of home-owning families under 35 quadrupled in four years! (From $142,000 in 2019 to $457,000 in 2023).
  • The median net worth of young families without homeownership increased by only $26,700 (from $17,300 in 2019 to $44,000 in 2023).

Interestingly, some "high-net-worth renters" actually own investment properties - they just don't live in them. Among renters with a net worth exceeding $150,000 in 2023, 100% owned non-primary residence investment properties.

Parents without property may create a "new middle-class dilemma"

Objective data is revealing that parents without property leave fewer assets to their children, creating a snowball effect that makes it even harder for middle-class families' children to break out of this circle and help their children "start the next stage of life."

Children from renting households face the reality of stagnant wage growth, high housing prices, and constantly increasing entry thresholds, making it impossible for them to afford homes on their own. This means that even if these children work hard and live diligently, they cannot overcome the hurdle of "buying a home."

Election: Housing policies relate to the future of the middle class

Housing issues in Canada have become an overwhelming focus of public livelihood.

At present, all three major federal parties promise to accelerate housing construction and introduce various incentives for first-time homebuyers. These measures should focus on supporting hardworking young families who find it difficult to obtain family assistance, breaking the intergenerational wealth barrier caused by property ownership rights.

For young families, especially those who "buy homes entirely on their own," these policies, if implemented, could be the most important "approach" for them to get closer to the housing market.

So, for your own future and your children's, please vote carefully!

News source:

https://financialpost.com/real-estate/homeownership-key-building-wealth-canada

Original text: https://www.toutiao.com/article/7497440625541857831/

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