As rising interest rates are boxing many individual buyers out of Canada’s housing market, brokerage Royal LePage says in a new report that Canadians are increasingly teaming up with family and friends just to afford a home.
In the report released Thursday, Royal LePage says an online survey by Leger of more than 500 respondents in August showed six per cent of homeowners currently co-own their property with someone other than their spouse or significant other.
Of that group, 89 per cent said they co-own with family while seven per cent co-own with friends. More than half of co-owners do so with a parent or parent-in-law.
Only 44 per cent of respondents from this group said they live with all other co-owners named in the deed.
Royal LePage says 76 per cent of survey respondents cited affordability concerns as the major motivating factor for those purchasing property with another party. Two-thirds of those who cited affordability worries in driving their purchase said they bought after the Bank of Canada started raising its benchmark interest rate in March 2022.
Since that time, Canadians have had a higher bar to qualify for a mortgage, preventing some individuals and even couples from being able to afford homes in the size or neighbourhood they might want.
According to a recent Royal LePage survey of real estate professionals, almost one in three (31 per cent) said they’d seen an uptick in the number of people buying with someone other than their spouse or partner since before the COVID-19 pandemic.
Royal LePage chief operating officer Karen Yolevski said in a statement that while families living together is not a new phenomenon, the decision is “increasingly made for financial reasons.”
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“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,” she said.
Nearly two-thirds of those who co-own a home have a detached, single-family property, according to Royal LePage.
“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,” Yolevski said.
Royal LePage said in the report that its web panel polling did not come with a margin of error but noted that the probability sample for a similar sized survey would come with a margin of error of +/- 4.4 per cent.