CANADIAN INEQUALITY

Rich parents are giving their kids $145K or more to get into Toronto's real estate market

People trying to get into Toronto's hot real estate market really just need rich parents, it seems.

While the Toronto real estate market seems to be cooling recently, prices have more than doubled for an average detached home in the last 10 years.

The National Bank of Canada says that Toronto residents need an annual household income of at least $205,342 to afford a home in the city these days. So most people getting into the housing market need a bit of help. Unfortunately, not everyone has access to "the bank of mom and dad."

But rich parents are more likely to give their kids a helping hand these days, according to a new Pollara Study report from IG Wealth Management.

The report defines "rich" as people who have an "accumulated, investable wealth of at least $1 million."

Overall more than three-quarters (77 per cent) of wealthy parents say they wanted to see their children "get ahead,” according to the report.

These parents were most likely to help cover education expenses. But the second most common financial relief these parents provided was to help kids buy their first home.

Almost three of four individuals surveyed said that they either had acted, or were likely to help their kids buy property. A few indicated they would foot the entire amount for a new home but most said they would provide 25 per cent or less of the total purchase price.

The average amount of a gift to assist with a home purchase was approximately $145,000, the report stated.

Where are these rich parents? The survey found the highest percentage (33 per cent) in highest in British Columbia with Ontario coming in a close second at 30 per cent.

While wealthy parents didn't mind dishing out for a first home, enthusiasm waned when it came to their next home (24 per cent) or a vacation property (10 per cent).

The Pollara Study was conducted between Aug. 5 and 12 this year.