Monday, April 20, 2015

Genworth homebuyer survey hints one third of new owners get cash from family

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By Pete Evans, CBC News Posted: Apr 07, 2015

Average 1st-time buyer put down 12% up front on a $293K home, mortgage insurer says

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Nearly a third of first-time homebuyers got some sort of money from their parents before making the purchase, new numbers from mortgage insurer Genworth suggest.
Genworth, in a presentation to real estate professionals gathered for a conference in Toronto on Tuesday, released the results of a recent survey  commissioned, looking at some of the characteristics of first-time homebuyers across the country.
The company interviewed 1,800 recent homebuyers between Feb. 5 and March 4. who were age 25 to 40 and had purchased a first home in the previous 24 months. 
Coming from the second-biggest mortgage insurer in Canada, the numbers paint a picture of a composite of the typical homebuyer.
More than half of first-time buyers purchased a conventional, fully detached home — although in condo-heavy Toronto, Vancouver and Montreal, that ratio drops to less than 30 per cent. 

The bank of mom and dad

The typical first-time buyer in Genworth's research paid about $293,000 for a first property, and put down 12 per cent, or $34,000, up front. Almost a third of them got money from their families to help pad their down payments.
Some 22 per cent were given an outright gift from their families, the numbers suggest, while nine per cent were given cash loans. As well, five per cent used proceeds of wedding gifts to buy a house and one per cent admitted they used the proceeds of an inheritance.
Add it all up, and almost 40 per cent of the homebuyers surveyed by Genworth used some sort of money that they hadn't earned or saved themselves.
Although many real estate watchers have long suspected that down payment money from family is a growing phenomenon, Genworth's numbers are among the most comprehensive attempts to catalogue just how much.
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