It’s a growing trend in Vancouver’s housing market: condos for kids

METRO VANCOUVER (NEWS 1130) – When you think of a typical condo owner in Metro Vancouver, what comes to mind?

How about a skateboard, braces and backpack full of homework?

There is a growing trend as nervous parents or grandparents create more school-aged property-owners hoping to give the young people in their lives a toe-hold in the region’s crazy real estate market.

“It used to only be the preserve of the very wealthy, but we are observing this now as a growing trend year-over-year,” says Chris Catliff, CEO of Blue Shore Financial.

“We know that over 80 per cent of first time buyers are getting help from their family in Vancouver, but we’re actually seeing them buy for very young children or grandchildren now.”

The trend typically involves creating a holding company or trust for the investment and renting the property out until the child becomes an adult.

“That creates some complexity, but it gives parents or grandparents control and it has a lot of upsides to it. It is a little bit costly to start off but it’s way better from a tax perspective in the long term,” he says. “It’s also not part of the parents’ personal net assets so it is free from liability such as bankruptcy. It’s creditor proof.”

With many baby boomers worried that their offspring will be priced out of the market, Catliff predicts we will see a massive transfer in housing-fueled wealth in the coming decades.

“We have roughly $200-billion in free-and-clear single-family houses owned by people over 55 in the Vancouver region and that means there is going to be a lot of this inter-generational transfer,” he tells NEWS 1130.

Catliff also believes parents or grandparents genuinely want to see pre-inheritances enjoyed by the young people in their lives, but he cautions it should be done carefully.

“Get some good advice. Make sure it’s well-considered and done in advance with a financial planner because we know that nothing creates emotion and rivalry like money and family. It’s important that if they do one thing for one grandkid that they do the same thing for the others, otherwise it can cause long term problems.”

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