Can Your Parents Help You Afford a Home in Vancouver?
Canada's house prices are still on the upward movement despite reports that they already surpassed economic fundamentals and houses in the country are already overvalued. Will the next generation still be able to afford a home in their home city such as Vancouver?
CBC News reported that a typical home in Vancouver now costs $1.4 million, a benchmark price according to figures from the Real Estate Board of Greater Vancouver. And as the value of homes continue to climb, parents could not help but worry for their children on how they can afford to own a home in the future. CTV News listed some tips on how parents can help secure the future of their children and ensure that the next generation will be able to have a roof over their head.
CTV News consulted Vancouver-based financial planner Annie Kvick and Toronto-based financial planner Shannon Lee Simmons. Kvick recommends investing in income properties that have low maintenance costs. This includes condo or a townhouse. Aside from being low-maintenance, a condo or a townhouse in Vancouver or Toronto can be rented out in an amount that would even out your purchasing expenses. When the time comes, parents can hand over the property to their children. But to help them value it and understand more their financial responsibilities, Kvick advises to have them foot the tax bill by applying for a loan or credit line. This way, they don't just get the house for "free."
Meanwhile, Simmons' tips include exposing your children to the stock market. Parents can give their children, who are 18 years old and above, a starting money that they can use to buy their own stocks and diversify between real estate and the stock market. By doing this, they get to feel how it is to have your own money and see them gain or lose in the stock market.