VIDEO: Canadians buying homes with family, friends to combat housing affordability woes: Royal LePage

In this video interview, Karen Yolevski, COO, Royal LePage Real Estate Services, discusses a Leger survey that indicates a growing trend in Canada where people are going into co-ownership of a home because of concerns about affordability.

Karen Yolevski

She talks about the reasons for the trend, who is doing this, where, why it will continue to grow and what to think about if you are considering co-ownership of a home.

PRESS RELEASE

TORONTO, Aug. 31, 2023 /CNW/ – According to a recent Royal LePage survey¹ conducted by Leger, six per cent of Canadian homeowners² co-own their property with another party, not including their spouse or significant other. Of this group, 89 per cent co-own with family members and seven per cent with friends. Another eight per cent co-own with someone who is not a friend or family member.

Concerning their co-owning situation, 44 per cent of co-owners³ say that they and all fellow co-owners live in the home together. A smaller percentage (28%) say that they co-own a home with another person(s), but they do not cohabitate. Six per cent of respondents say that they co-own a home with another person(s) and neither party uses the home as a primary residence, rather as an investment or recreational property.

The COVID-19 pandemic forced some Canadians to reconsider their living situation, with many choosing to share living space with friends or family in a time of isolation. Now, in an era where social distancing restrictions have ceased, a number of Canadians continue to choose cohabitation to address their housing needs. According to a recent Royal LePage survey⁴ of real estate professionals across the country, 23 per cent say that they have seen somewhat of an increase in the number of homebuyers purchasing a property with another person(s), other than their spouse or significant other, compared to pre-pandemic times. Eight per cent say they have seen a noticeable increase over the same time period.

“Different generations of families living under one roof is not a new phenomenon, but has been growing in popularity in recent years,” said Karen Yolevski, COO, Royal LePage Real Estate Services Ltd. “Census data⁵ shows that multigenerational households are now the fastest growing household type in Canada. Households group together for many reasons, including communal care for elderly parents, help raising children, cultural preferences or simply to be together. However, the decision to live together, including co-owning a home, is a decision increasingly made for financial reasons. In an environment where home prices and interest rates have risen quickly and sharply, and where the threshold to qualify for a mortgage has become much more challenging, Canadians are pooling their resources and buying homes together. In cases where homebuyers cannot afford to purchase on their own, they are combining their buying power with their parents, children, siblings or even friends.”

Of all co-owners surveyed, 65 per cent say that they co-own a single-family detached home, 19 per cent say they share an attached home, such as a townhouse or semi detached property, and 13 per cent say they share a condominium/apartment.

In light of the rising cost of living in recent years, alongside higher interest rates and housing prices, a large number of co-owners say that their decision to share a home was prompted by a lack of affordability.

According to the survey, 76 per cent of co-owners say that affordability was a major motivating factor in their decision to co-purchase their property. Not surprisingly, that number rises to 83 per cent for co-owners between the ages of 25 and 34. Thirty-two per cent of respondents who were influenced by a lack of affordability say that they co-purchased their property after the Bank of Canada began raising interest rates in March of 2022.

Twenty-five per cent of Royal LePage real estate professionals reported somewhat of an increase in the number of homebuyers purchasing a property with another person(s), other than their spouse or significant other, since interest rates began to rise. Eight per cent say they have seen a noticeable increase over the same time period.

“In a market beset by reduced home supply, escalating prices, tightened mortgage qualification requirements, and the highest borrowing rates in more than two decades, many buyers are having difficulties securing the property that they want. Some Canadians are using co-ownership as a way of boosting their borrowing capacity or lowering their monthly mortgage costs, helping them achieve their goal of home ownership,” said Yolevski. “By dividing the cost of a home between more people, Canadians can not only get their foot on the property ladder more easily, but also expand their home search to more desirable locations or larger properties that may not have been accessible with their budget alone.”

Of those who co-own a home with another person(s) and live in the home together, nearly half (49%) say that they purchased the home with another party because they would not have been able to afford a home on their own. Thirty-eight per cent say that by co-owning, they were able to afford a larger property and/or a property in a more desirable neighbourhood. Thirty per cent say that they purchased a co-owned home because they required family support with childcare or taking care of elderly relatives.

“Opting to co-own with friends or family is not as simple as signing a piece of paper next to someone else’s name – co-owning a home often comes with meaningful lifestyle changes, and requires in-depth conversations over financial, legal and personal obligations,” said Yolevski. “Regardless of whether you live in the home with your fellow co-owners or not, the responsibilities of owning a home with other people are shared, but so are the benefits.”

rlp.ca/table_2023-Canadian-co-owners-survey

An online survey of 501 Canadians 18+, who co-own their home with someone other than their spouse, was completed between August 10, 2023, and August 21, 2023, using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e., a web panel in this case). For comparative purposes, though, a probability sample of 501 respondents would have a margin of error of ±4.4%, 19 times out of 20. N.B. Participants could co-own with a spouse, but must co-own with someone other than their spouse as well.

A national online survey of 601 Royal LePage brokers and sales representatives in real estate markets across Canada was conducted between August 17th, 2023, and August 22nd, 2023.

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of approximately 20,000 real estate professionals in over 670 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, which has been dedicated to supporting women’s shelters and domestic violence prevention programs for 25 years. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbolTSX:BRE. For more information, please visit www.royallepage.ca.

Mario Toneguzzi