Are homeownership dreams out of reach for millennials?

Shannon Chambers' advice to anyone looking to get into the Toronto housing market is to start saving early – preferably in your teens – scale down your expectations and brace yourself for bidding wars.

The 26-year-old purchased a house with her husband in Toronto last April. The couple beat out three other offers on a two-bedroom fixer-upper in the city's east end.

Chambers said if it wasn't for an income property that her husband had purchased in the Niagara region years earlier, and later sold when the couple was prepared to buy in Toronto, they wouldn't have had the money for a down payment.

"(Homeownership) is something you should think of when you're 18, to start making investments," Chambers told CTVNews.ca. "If not, you're going to have to ask your parents for money, or not live in Toronto."

Millennials in Toronto and Vancouver are having a tough time getting into the housing market where the average price for a detached home has topped the $1-million mark.

A Bank of Montreal report released Tuesday found that while more than half of Canadian millennials are tired of paying rent, 70 per cent would rather hold out for the home they really want before jumping into the real estate market.

But real estate industry watchers say those dream houses are likely out of reach in red hot housing markets.  

Sameh Elrefaei, managing director of personal lending products at BMO Bank of Montreal, says the majority of millennials BMO surveyed said they hoped to buy a detached home -- something he says may not be realistic in Toronto and Vancouver.

Condos remain affordable in hot housing markets

"When you look at the reality of what they're getting into, it's more of the condos and townhomes."

Elrefaei said owning a detached home 20 years ago was much easier than it is today, with the average price of a detached home up to $1.2 million in Toronto and $1.3 million in Metro Vancouver.

"(Twenty years ago), there was a lot more availability and choice, at least from the supply perspective," he said. "It was a lot easier to get a larger lot, but now the choices are more restricted."

But he said smaller properties, primarily condos, remain plentiful in Toronto.

The average condo price in Toronto hit $416,251 in March, according to the Toronto Real Estate Board.

Elrefaei said with the option to put down as little as five per cent as a down payment for properties that are less than $500,000, condos remain a more affordable option for first-time homeowners.

In Vancouver, Vancity credit union investment adviser Sophie Salcito says first-time home buyers are looking to Vancouver’s suburbs for detached homes, and are willing to endure longer and longer commutes into the city. But she noted that prices in suburbs are steadily on the rise.

"People will have to slowly adjust to the fact that maybe I can't have a single family home, and I'll be raising kids in a townhome or even a condo," she said, "It's not unusual in many other cities in the world, but it's not common (in Vancouver), so it's an adjustment."

Millennials relying on 'safety net of mom and dad'

The BMO report indicated that two-thirds of millennials anticipate relying on their parents or family members for as much as 10 per cent of the home's purchase price.

Salcito says it's not uncommon for her clients to hand over hundreds of thousands of dollars to their children to help them with a down payment on their first home.

"I see parents taking out $100,000 or $200,000 to help their child buy a house," Salcito said. "They just take the cash and gift it."

The rapid rise in housing prices in Toronto and Vancouver has left baby boomers sitting on significant equity on the homes they purchased decades ago. Their children, meanwhile, are struggling to get into a housing market.

"It just sort of lined up that baby boomers are downsizing and the real estate market for millennials is impossible to get into," says Toronto realtor David Fleming. "Those two things have certainly worked in tandem to provide equity for the kids to go out and buy properties."

Fleming estimates that half of the first-time homebuyers he works with receive financial help from their parents.

"Knowing the safety net of mom and dad is there is one way of doing it," he said. "I have clients who will just buy their children property in cash."

Parents building additions, swapping homes, with kids

Parents are not only turning to cash or loans to help their children with their housing dreams. Some are building additions on their property to make room for their kids and grandkids. 

Laneway housing is becoming increasingly popular in Vancouver, allowing homeowners to transforms garages that sit on urban laneways into smaller, detached homes.

Salcito said an elderly couple she works with has opted to take out a line of credit to build a laneway home in their backyard. Once it's complete, the couple plans to move into the 1,000 square-foot addition, so their daughter and three grandchildren can move into the larger home on the property.

But laneway homes are not necessarily an economical way of getting into the housing market, as the renovations could run between $300,000 and $400,000.

Salcito said she's also seen older parents with larger, single-family homes swap houses with their kids and move into their condos.

"There will be some legal expenses and financing costs, but when you put those few thousand dollars into perspective, it's doable," she said.

Visit CTVNews.ca Friday for a look at the casualties of hot housing markets.