In the wake of soaring home prices and interest rates, more Canadians are choosing to co-own homes with family, friends, and non-relatives as a solution to affordability challenges, according to a new report from Royal LePage.
The survey, conducted by Leger, looked at 501 Canadian homeowners who share their property with someone other than their spouse.
Among this group, a significant 89 per cent have chosen to co-own their homes with family members, while 7.0 per cent share ownership with friends. Another 8.0 per cent of respondents have opted to co-own with individuals outside the circle of family and friends.
Diverse co-ownership situations
When it comes to living arrangements within these co-owned properties, 44 per cent of co- owners revealed that all parties involved reside in the property together. In contrast, 28 per cent co-own homes but do not live together, and 6.0 per cent view their co-owned property as an investment or recreational space rather than a primary residence.
The lasting influence of the pandemic
The ongoing impact of the COVID-19 pandemic has prompted many Canadians to reconsider their housing situations, fostering a trend of shared living spaces with friends and family. Now, even as social distancing restrictions have eased, a considerable number of Canadians are continuing to explore co-ownership arrangements as a means to address their housing needs effectively.
According to a recent Royal LePage survey, real estate professionals across Canada have noted the growing popularity of purchasing properties with others. A recent survey conducted among the company’s brokers and sales representatives revealed that 23 per cent have observed a moderate increase in the number of homebuyers opting for co-purchasing arrangements compared to pre-pandemic times. Another 8.0 per cent have witnessed a significant uptick in such transactions.
Financial realities and multigenerational living dynamics
Karen Yolevski, COO of Royal LePage Real Estate Services Ltd., emphasized the multi- dimensional nature of this trend. “Different generations of families living under one roof is not a new phenomenon but has been growing in popularity,” Yolevski explained.
Census data highlights the rise of multigenerational households, with financial considerations now driving decisions to co-own homes. As home prices, interest rates, and mortgage qualifications become more challenging, Canadians are pooling their resources to enter the housing market.
Yolevski adds, “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 or apartment.
Affordability spurs co-ownership
Three-quarters of co-owners indicated that affordability played a significant role in their decision to co-purchase property. This figure rises to 83 per cent among co-owners aged 25 to 34. A considerable proportion of respondents mentioned that they embarked on co-purchasing arrangements in response to rising interest rates implemented by the Bank of Canada.
“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…”
A spectrum of motivations
Among those who co-own and live in the property together, 49 per cent stated that their co- purchase was driven by the inability to afford a home individually. Thirty-eight per cent cited the advantage of affording a larger property or a residence in a preferred neighborhood. Additionally, 30 per cent chose co-ownership to facilitate family support with childcare or elderly care responsibilities.
Yolevski underlines the significance of the decision to co-own, emphasizing the importance of thorough conversations covering financial, legal, and personal aspects. “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.”