YOU ARE NOT HELPING THE PROBLEM

My city Toronto Canada is in the middle of an unprecedented building craze. Someone said 800 new Condominium buildings are being built. Since it seems, these are all going up at the same time, there is a lot of scaffolding up over sidewalks.

Meanwhile, additions to the streetcar system our politicians favour is being put underground for part of it’s long route along one of our main crosstown thoroughfares.

All this makes for a lot of delays in getting where we are going but also hope that when all this is eventually ready we will have a lot of nice new buildings and better transportation. We can only hope.

Meanwhile, it seems a lot of parents nearing retirement have finally found a new way of getting their adult children out of the house. They are ‘loaning’ them large amounts of capital to make down payments on a house. Some also give them loans and various chunks of money for their expenses.

This ‘borrowing’ is effecting the price of houses significantly since, easy borrowing (from short sighted retirement aged parents) is turning the next generation into perpetually indebted people buying houses they can’t afford. The added problem is that the price of houses is being artificially inflated as well.

No one it seems, wants to pour water on these ideas by considering that a change in the mortgage rates or interest rates will spell disaster for an even larger number of people who were already living beyond their means. 

In addition, the parents who were ‘only trying to help’ their adult children have taken great chunks of capital and ‘loaned’ it at just the time they will need to begin drawing upon it themselves in retirement. 

I very much doubt that this is not being done all over North America and possibly the world for people's adult children.

Somewhere along the way parents seem not to have learned to let their children grow up and make their own mistakes. The law and the school system also enabled them to be much older before assuming any adult responsibilities.

Someone has told them that they benefited by boom times and their children can’t live the same kind of life they are used to, without the parent’s continuing help and financial support.

Unfortunately, the hand up, is too close to a hand out or early inheritance by seniors who are likely to live longer than ever and with less capital remaining because of their misguided ‘help’ to over indulged ‘children’.

Adult children it seems are never to learn that earlier generations only got the benefits of long years of building but spending long years, saving and building up from the starter home to the one that became the established family home.

I’d say that because this is not being taught or understood, we will have a generation of new home owners heavily mortgaged despite unearned help from their ageing parents. They will also have unrealistic expectations of being able to live lifestyles they could never afford. Meanwhile, a change in the market for property and/or interest rates may leave both the ‘children’ and their parents in financial straits when the financial market changes,  taking their large benefactions to their children with it.