When mommy and daddy help you buy.

It’s hard to buy your first place.

Thats why more and more parents are chipping in to help junior get their feet in the real estate market.

“The (housing) market would have been much weaker if we didn’t have this phenomenon. There’s no question about that,” says Tal, deputy chief economist of CIBC World Markets.

“I’d say this generation is getting more help than any other generation did, but I’d say they need this help more than any generation, too.”

Interest rates may be keeping monthly payments relatively affordable, but the big issue for young first-time buyers has been coming up with sizable downpayments when the average price of a home in the GTA is now more than $534,000 — more than $850,000 for a detached in the City of Toronto — almost double the $293,000 they averaged just a decade ago.

Saving can be especially tough when many first-time buyers are still paying off student loans and dealing with rents that can run from $1,100 to more than $2,000 a month.

Read the full article in the The Star.

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#16: so you say RE goes to zero, like BBRY at the moment?

Yes, pick one stock out of tens of thousands, on one exchange out of dozens worldwide. It’s not going to 0 anyways, shows how much you know about this company, and is precisely the reason you should not have bought it in the first place.

RE can easily go to 0. If you buy with 5% down, you’re only a tiny little bump away from 0 equity. Actually, you’re at 0 equity right from day one, after you account for CMHC premiums and transaction fees you have to make up for in order to sell.


Re: #43 Patriotz
Yes, boomers Think they will have lots of money.

Also, I wasn’t implying that it was a “relatively easy way to transfer wealth between generations” because it was tax efficient. But it is a way for boomers to hand over a chunk of cash to their 20 something child and feel like it’s being put to good use (even if that is in an overvalued highly leveraged crack shack).

[…] George pointed out this this story about a strata council member who bilked condo owners out of $160K. […]

Son of Ponzi

The Dim Sum bond reminds me of the MBS debacle in 2008, which I believe will soon raise it’s ugly head again.
Nobody really knows what’s out there and who owns what.
Better keep your assets liquid and where you can see it.
Don’t trust Realtors and Financial advisers.


“each bond has a face value of about 16 cents”

I think they meant RMB 2.5 Billion. Mike De Jong seems eager to start investing in China while providing a low default rate backed by the BC tax base. I’m sure he knows what he’s doing and won’t invest in anything that won’t provide a decent return.

Bag it and tag it

Greater Van Res Composite down 0.3% MoM.

Bag it and tag it

Van West appartments down 1.9% MoM.

Son of Ponzi

What we have seen in the last few months was a dead cat bounce.
Now let’s step back and watch the RE market continue on it’s downward slide.

Son of Ponzi

The parents’ thinking process is like this:
RE will always go up. So, if we help out our kids, their property values will also go up,
So, the family as a whole will be richer.
Two generations piling all their assets into one investment class.
Perfect recipe for disaster.


“The board’s MLS Home Price Index composite benchmark price for all residential properties in Greater Vancouver was $600,700, a 0.5% decline from a year ago.”

‘Down’ is the new ‘Up’. Gravity sucks.



” They have lots of money for retirement because their East Side home is worth 1.5 mil.”

You mean they think they will have lots of money.

” Now when the 2nd property raises in value, the kid can sell it and get the personal residence cap gains exemption etc. ”

Wow. How much money will they have lost from the rent vs own deficit? Also where are they going to live after that?

“If it all works out, it’s a great relatively easy way to transfer wealth between generations tax free.”

Canada has no gift or inheritance taxes, so any intergenerational transfer is tax free. Transferring ownership in stocks or other taxable assets could incur capital gains taxes, but that’s not relevant to Mom and Dad.


Welcome to month 18 of the bear market. It has now been 17 months since the peak (according to REBGV data). Market is down 3.9% in nominal terms. 5.25 % in real (inflation adjusted) terms.

Son of Ponzi

# 37.
“So each bond has a face value of about 16 cents”.
Financial Freudian slip.
When this convoluted thing unwinds, that’s how much each bond will probably be worth.
Like a piece of Dim Sum which cost not much, but you need about 5 helpings before you’re full.


Regarding RE going to zero. Others have pointed this out, but you’d have to be a moron to not realize that an investment doesn’t have to go to zero for you to go bankrupt if you’re deep in debt on it.

Leverage, a beautiful thing on the way up, a bitch on the way down.


That Toronto Star article is infuriating. It just sounds so unsustainable and the article doesn’t acknowledge the possibility of parents continuing to prop up an already over inflated market.

I have Boomer aged friends who have paid off their primary residence and are using their extra income to help their kids purchase properties. They have lots of money for retirement because their East Side home is worth 1.5 mil. Now when the 2nd property raises in value, the kid can sell it and get the personal residence cap gains exemption etc.

If it all works out, it’s a great relatively easy way to transfer wealth between generations tax free. Or the house of cards might blow over leaving junior with negative equity and the parents looking at a less liquid and less funded retirement.


Province:” Vancouver home sales climbing, prices stalled”


“The board’s MLS Home Price Index composite benchmark price for all residential properties in Greater Vancouver was $600,700, a 0.5% decline from a year ago.”


@33: ” just over $400 million worth.. just over 2.5 billion bonds ”

So each bond has a face value of about 16 cents?


I read somewhere the proceeds from BC’s RMB-denominated bonds would be reinvested in China because they’re denominated in Chinese currency, so yeah, that sounds like nothing could possibly go wrong there.


Regarding the CBC story about the strata board member who defrauded his strata, based on one comment below the story, it looks like there is much more to this story than CBC is reporting: “On TV news , CBC has twisted the story a bit. Patrick Au is one of the sole pre-selling agent for this development. This condo was built in 94 when it is still under condo act. But …at pre-sell show room, only sweet talk, deception , dirty trick being presented to us. Then when we got our sell completed , leaks found everywhere, developer throw us a small amount of $ cheque, play disappeared, after 1 yr. Lawyers at that time not knowledgable enough about this kind of sell. When seeing land title still under condo act. Who will suspect those abbreviation below meant soemthing else.… Read more »


A strata board member for a condo building in East Van is guilty of defrauding his fellow homeowners out of $160k. File this one under the hidden costs of condo ownership. From CBC: “A former member of a Vancouver strata council has been sentenced to two years less a day imprisonment — to be served in the community — after bilking his fellow homeowners out of more than $160,000… Over a four-year period, starting in 2001, Au slowly took control of the strata’s finances and started siphoning off funds for his personal gain. ‘Don’t deal with photocopies or photocopies of photocopies of original receipts.’- Tony Gioventu, executive director, Condominium Homeowners Association Tony Gioventu, executive director of the Condominium Homeowners Association, says the case is a clear warning for those living in a strata building. “We need strata corporations to really… Read more »


BC is the first jurisdiction outside China to sell Renminbi-denominated bonds. From CBC:

“British Columbia has become the first foreign government to sell bonds into China’s domestic market, issuing just over $400 million worth of debt paying 2.25 per cent…

The province sold just over 2.5 billion bonds denominated in China’s currency, the renminbi — which is also known as RMB or yuan — with a coupon of 2.25 per cent.

The one-year so-called “dim sum” bonds will pay out in November 2014.”



@4: “Then 2008 comes and all your investments evaporates and then what do you do?”

Well what I did in 2008 was buy some more. But “all my investments” hadn’t “evaporated”, so I don’t quite fit your profile.


@27: “Depending on how much of a downpayment would be made, I could actually be saving money by renting instead of buying.”

It doesn’t depend on how much down payment, because there is an opportunity cost on that.


@26: “How many people buy RIM with 75% leverage?”

How many people put their more than their entire net worth into RIM with 75% leverage?


wish i could live in a city chock full of mountain views and food carts.