Thursday, November 7, 2013

Are Gift Letters blowing up the Real Estate Bubble?

Recently a National Post article brought up an interesting issue. Are parent's fueling the real estate boom in Toronto by giving their children a down payment to purchase a home now rather than let them take time to save it up on their own.
    IN a recent blog, Garth Turner, a former MP, said that this is running counter to the government's attempt to cool the real estate market by getting people into the market before they normally would be entering it.
   He felt that this was throwing the natural forces of the market off. I'm not so sure about that.
 When I got married and started looking at our first home, my parents gave us some money for the down payment. I found out years later that my grandparents did the same thing for my parents when they bought their first home.
   If this has been going on for 3 generations in my family, I think it probably is going on in plenty of other Canadian families.
  Sometimes people look for a problem when there isn't one.
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