Greg Bonnell | June 6, 2016

A record wave of inheritance will transfer billions in wealth over the next decade, taking some of the sting out of the real estate market for young Canadians, CIBC’s deputy chief economist said Monday.

In his report “The Looming Bequest Boom – What Should We Expect?”, Benjamin Tal argues more than $750 billion will be transferred to Canadians between the ages of 50 to 75 in the next 10 years.

The “largest intergenerational wealth transfer in Canadian history” will have widespread effects across Canadian life, including the housing market.

The country has never seen more people over the age of 75, Tal writes, adding the “new cohort of that age group is not only the largest on record, but also the wealthiest.”

The uncomfortable truth, given we’re talking about our loved ones, is that “more Canadians over the age of 75 will pass away in the coming decade.”

So what does that do to the housing market?

“We have a lack of supply,” in Toronto and Vancouver, Tal told BNN in an interview Monday.

“One of the reasons is that most of those low-rise are being occupied by those people who are relatively older.”

As those Canadians gradually leave those homes, “it might modestly ease the shortage” of low-rise homes.

Second, many of those Canadians aged 50 to 75 that are in line for inheritances are already financially set in terms of home ownership and investments, or at least on a solid path.

That means a large amount of those billions being passed down could flow right through the boomers to their children, the millennials.

“It will not change the system, but it will ease the pain,” Tal told BNN.

Still, Tal cautions that Canada’s runaway real estate markets are “extremely complex,” and there’s no simple solution when it comes to finding ways to cool them.

The “inheritance wave will not solve the problem, but it’s a step in the right direction,” Tal said.