A Bloomberg agency report pointed to the decline in housing affordability in Canada, making it a political issue that pressures Prime Minister Justin Trudeau, who is recording a decline in opinion polls.

With Canadian home prices lower than they have been in more than 30 years, a study indicated that parents play a greater role in determining whether their children can buy a home based on their own financial capabilities.

The likelihood of children of homeowners owning a home is more than twice as high compared to other children whose parents do not own any homes, according to a study conducted by Statistics Canada based on 2021 data. More than 17 percent own homes, compared to about 8 percent of adult children who do not own homes. Among adults whose parents own multiple properties, the home ownership rate was about 24 percent.

Decline in opinion polls

Housing affordability has become a growing political issue in Canada, where Prime Minister Justin Trudeau is struggling to solve the problem as he falls behind in opinion polls and even faces calls to leave his party. While broader inflation has started to decline with rising interest rates, the pre-existing shortage of housing stock has limited the impact on home prices and has also led to rising rents.

This means that despite falling home prices, this was not enough to offset rising mortgage costs, and affordability has actually worsened. The Bank of Canada's housing affordability index is now approaching its highest level since 1990.

Statistics Canada said in a press release accompanying the study: “These findings reveal a link between parental wealth and home ownership by their children.” 

The study said that while this may be due to wealthier parents helping to pay for homes for their adult children, it can also be linked to those children’s better access to certain social networks and increased investment in their education.