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Parents Supporting Adult Children

By June 5, 2017April 28th, 2023Moments
Parents Supporting Adult Children

Nowadays there are more and more parents supporting their adult children due to the high cost of living. It’s estimated that it now takes 23 years to save for a down payment for a home in Vancouver. Housing prices in the region are sky-high compared to incomes, and it has also been estimated that by 2020 monthly payments on a single-family home will exceed the average monthly income in the city.

The benchmark price for an east-side condo as of April 2017 was $400,500, according to the Real Estate Board of Greater Vancouver. The benchmark for a townhouse was $720,300. Meanwhile, the median household income in Vancouver is just $67,000. Only 15 per cent of Metro Vancouver homes cost less than $500,000 and provide access to at least three bedrooms.

How Much Do You Need For a Down Payment In Vancouver?

If you want to live in Vancouver, you’re going to have to pay a premium… and plan to save nearly $2,800 a month for at least five years.

  • Median home price: $1,098,599
  • Average down payment: 15% = $164,790
  • Monthly saving goal (5 years): $2,747

(Source)

Parents to Continue Supporting Adult Children into the Future.

According to experts, over the coming decades the biggest issue in Vancouver will be getting the pricing down to make units available for those moderate incomes–the people who, by and large, make Vancouver work, as well as young professionals at the start of their career.

Increasingly, Boomer parents are helping their Millennial children. A recent survey by the international bank HSBC found that 37 per cent of millennial home buyers receive some financial help from parents in order to close the sale.

What is the Impact of Supporting Your Adult Children

You may be getting your kids locked into a financial obligation they are not prepared for. For example, according to the HSBC survey, 21 per cent of millennials who recently bought a house borrowed from family after buying to cover unexpected costs.

By lending money to children in order to break into the housing market, parents may destroy the family finances prematurely.

The Increasing Cost of Helping Aging Parents

Boomers don’t only have to worry about helping out their children scale small monetary mountains. They also have to ensure that their elder parents are financially sound. And it can be expensive. The cost of caring for aging parents is estimated to cost Canadians $33 billion a year. This figure includes both direct, out-of-pocket expenses as well as time off work. This figure will only grow over time, finds a new report by CIBC Capital Markets.

An aging population combined with longer life spans and strained social services has in recent years seen more and more Canadians taking on the role of caregiver for their aging parents, and in the coming years, that tendency is only likely to intensify, according to the CIBC report.

Two million Canadians (14%) with a parent aged 65 or over, also pay for elder-care expenses. On average, they spend $3,300 a year, for a total of $6 billion. Combined direct and indirect elder-care costs, the report notes, are $33 billion.

Conclusion: Make Sure You Take Care of Yourself, First

Boomers should ensure they have prepared for their own retirement and their own parents’ affairs. If a family spends all of their financial resources on aging parents and on children, they may not have enough for their own senior care.

 

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