While most Canadians have officially given up on the prospect of ever owning a home, some are still trying to make it easier for the next generation.
Just take Vancouver, for example. With real estate prices continuing to surge, some parents are actually doing the unthinkable: they’re buying their infant children condos so that their young ones won’t be priced out of the city. That’s right, children and babies now own homes that you could never even dream of affording.
So how exactly are they doing this?
“[The home is] not personally owned, it’s owned by a business or trust,” Kristine Skinner, a financial adviser with BlueShore Financial, said.
Skinner has already helped about five clients buy Vancouver homes for their children in just this year alone. The way the process works is simple enough. Parents work with Advisers like Skinner to purchase properties through a business or trust. The home is then rented out until the kids are all grown up and ready to move in, which leaves plenty of time to pay off all the debt.
It might seem risky, but the people doing this certainly have a point. The Canadian Real Estate Association reports that Greater Vancouver saw a shocking 29.7 per cent year-over-year price gain. The average price of a detached home has since skyrocketed to more than $1.5 million.
“It’s just not going to get any better for her at all,” Vancouver resident Les Robertson said, referring to his six-month-old daughter.
Before you go out and buy your own toddler a house of their own though, keep in mind experts are split on whether or not it’s a good investment.
“It says to me that people think the values [in the housing market] are going to continue to climb, and I don’t think that’s necessarily the case. Certainly not in cities like Vancouver and Toronto,” John Andrew, executive director of Queen’s University Real Estate Roundtable, said. “I think Vancouver is at a significant risk for a correction.”
Instead, Andrew recommends parents put their money into a “well-diversified portfolio.”
For more information about this new housing trend, check out the video above.