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A condo building under construction in Vancouver on March 30, 2018. Nearly one in four home sales across all residential property types in British Columbia were non-market and between related parties in 2018, according to the Canadian Housing Statistics Program.

DARRYL DYCK/The Canadian Press

Nearly 40 per cent of detached house sales in Metro Vancouver in 2018 were non-market transactions, the majority of which were among relatives, according to a new government report that shows for the first time how big a role families play in generating housing wealth.

Across all residential property types in B.C., nearly one in four home sales were non-market and between related parties in 2018, according to the Canadian Housing Statistics Program (CHSP), which analyzed the province’s property assessment records and land transfer data.

Statistics Canada created CHSP after the 2016-17 housing boom in Vancouver and Toronto to help shed more light on buyers and forces driving home prices.

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A non-market sale means a transaction in which buyers and sellers are related through family or bound legally such as when a bank has a lien on a home.

Related-party sales are transactions between relatives such as spouses, children, grandchildren, siblings, aunts, uncles, nieces and nephews, according to B.C. assessment information. It also includes internal company transactions, when property is owned by a corporate entity. Foreclosures and forfeitures are included in non-market sales, but account for a small minority, according to Statscan.

“We see that the vast majority of non-market transactions are between relatives,” said Jean-Philippe Deschamps-Laporte, head of the CHSP. “Given the value of those assets, there seems to be a significant shift of wealth between relatives in that segment of the market.”

Although the report analyzed only one year of data, it is the first time non-market transactions have been measured and suggests that residential sales are routinely undercounted. Currently, the most comprehensive accounting of sales activity is from the Canadian Real Estate Association, which analyzes transactions handled by realtors through the Multiple Listing Service system.

It is also the first time that Canadian data have been able to show home sales among family members.

Realtors, mortgage brokers and major lenders have all observed parents increasingly helping their kids get into the housing market as home values inflate. The typical home price reached $726,900 nationally in June, which is 25 per cent higher than the previous year, according to CREA’s price index, which adjusts for pricing volatility.

In the Toronto region, which is the country’s major job centre, the typical home price is well above $1-million, which requires buyers to have 20 per cent or $200,000 for the down payment. That amount is tough to achieve, and parents are advancing inheritances to help their children buy property, according to lenders. And this report shows that family members are also transferring their property to younger generations.

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The CHSP report analyzes only B.C., Nova Scotia and New Brunswick, as Statscan was not able to secure land transfer data from the other provinces, including Ontario. In the two Atlantic provinces, the report found that 30 per cent of the sales were non-market in 2018.

In B.C., the largest share of non-market sales occurred in mobile homes, followed by detached houses, semi-detached houses, row houses and condos. In Metro Vancouver, condos also represented the smallest share of non-market sales.

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