As interest rates and inflation continue to etch away at affordability, some Canadians are opting to break into the housing market with the help of friends, family, and acquaintances.
According to a new survey from Royal LePage, 6% of Canadian homeowners co-own their property with another party besides their spouse or significant other. Delving a little deeper into the trend, 89% co-own with family members, 7% co-own with friends, and 8% co-own with “someone who is not a friend or family member.”
In some cases, co-ownership goes hand-in-hand roommate arrangements, with 44% of Canadian co-owners also cohabitating, according to the real estate company.
Karen Yolevski, Chief Operating Officer for Royal LePage’s Corporate Brokerages, notes that the decision to co-own a home is “increasingly made for financial reasons.” She says the trend is a testament to today’s elevated borrowing rates — the likes of which have reached a two-decade high — and the fact that it has become “much more challenging” for lone purchasers to qualify for mortgages amid tightened qualification requirements.
And the data agrees. Royal LePage says that 76% of co-owners cite affordability as a “major motivating factor” in the decision to co-purchase a property. (For co-owners between the ages of 25 and 34, that figure shoots up to 83%.) Meanwhile, 32% say that the choice to co-purchase a property followed the Bank of Canada’s first interest rate hike last March.
It seems that real estate professionals are wise to the trend, as well as the motivations behind it, with 25% indicating to Royal LePage that they’ve observed “somewhat” of an uptick in co-purchasing since rates began to rise. (Meanwhile, 8% say the uptick is “noticeable.”)
“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,” says Yolevski.
In that vein, 38% of co-owners say purchasing a home collaboratively has allowed them to afford a larger property or a property in a more desirable neighbourhood.
Thursday’s data is based on an online survey conducted by market research and analytics company Leger, completed between August 10 and August 21, 2023. It reflects the sentiments of around 500 Canadians over the age of 18 who co-own their home with someone other than their spouse.