Arranged mortgages: How Canadian parents influence their children’s housing choices

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Parents who experienced success through homeownership may unconsciously transmit an overconfidence bias to their children, encouraging them to stretch beyond their means to enter the market

Many Canadians may scoff at the idea of arranged marriages – all the while actively endorsing a culture of arranged mortgages for their own children.. This is basically a Canadian dowry.

How might these inherited biases be influencing an entire generation’s approach to homeownership in Canada? Alternatively, loss aversion may lead young adults to feel an overwhelming pressure to buy, fearing they’ll miss out on potential gains if they don’t act now. This fear of missing out can drive people to make financially unsound decisions, prioritizing homeownership at the expense of other important financial goals.

We must also acknowledge the emotional premium placed on homeownership. There’s an undeniable allure to being an owner rather than a renter. But the question we need to ask ourselves is this: How much of a premium are we willing to pay for this emotional satisfaction? In today’s market, that premium comes at the cost of financial flexibility, career opportunities and even personal relationships.

 

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