Canadian's Desire to Enter the Housing Market Prompts New Trends in Co-Ownership, Rent-To-Own and Rental-Unit Scenarios.
Economic factors, including the high cost of living, high-interest rates and the price of housing, are prompting one-third of Canadians to explore alternative ways of entering the housing market (32 percent), according to a Leger survey commissioned by RE/MAX Canada. When asked to consider the future, almost half of Canadians say they would keep non-traditional methods of buying a home in the mix (48 percent).
RE/MAX examined 22 cities across Canada and assessed trends in non-traditional home-ownership models, including co-ownership with friends and family, rent-to-own scenarios, and purchasing homes with additional units or suites for income potential, as opposed to more traditional avenues. Here are the findings.
Expert Evaluation
Canadians from coast to coast are grappling with affordability challenges, but at the same time, their desire to achieve home ownership remains strong. This is prompting many to seriously consider alternative ways to get their foot in the door, where it might not be feasible under the traditional ownership model of a single person or couple purchasing with between five and 20 percent down.
Christopher Alexander
President, RE/MAX Canada
Benjamin Tal
Deputy Chief Economist,
CIBC World Markets Inc.
Non-traditional home ownership models are also emblematic of a new, modernized chapter in what it means to be a “homeowner,” an identifier more often associated with an individual or a couple. “But creativity in the home-buying process is a workaround, not a solution to Canada’s affordability crisis. Like modern, innovative homebuyers, our governments must be more strategic and visionary in how we can use existing lands and real estate to drive our housing supply to allow for a greater diversity of housing for all Canadians,” says Alexander. “Despite ongoing affordability and supply crises, Canadians still dream of home ownership, and as they wait for governments to come together to create a cohesive, national housing strategy, they’ve become innovative and resourceful in achieving this dream.”
According to a Leger survey commissioned on behalf of RE/MAX Canada, 48 percent of Canadians would consider purchasing a home using an alternative model. Among Canadians, 22 percent would purchase under a rent-to-own scenario; 21 percent would consider co-ownership with a family member who isn’t a spouse or partner; and 17 percent would consider purchasing a home intending to be the primary tenant and renting out a part of the home to someone else.
There’s also a cohort of Canadians that is open to the idea of non-traditional home ownership but is not sure what the process would entail (49 percent). Of those who are open to this idea, the majority (59 percent) believe working with a realtor who could advise on how to navigate the non-traditional purchasing journey would be beneficial.
According to the Leger survey, 13 percent of current homeowners purchased a home in a non-traditional way. Demographically, young (aged 18-34) homeowners (25 percent), and BIPOC Canadians (27 percent) are significantly more likely to have purchased their home using an alternative method. Likewise, young (aged 18-34) Canadians (70 percent), BIPOC Canadians (72 percent), and Canadians with children under 18 (71 percent) who would consider non-traditional homeownership but are not sure what the process would entail, are more likely to agree that working with a licensed realtor who specializes in non-traditional home ownership situations would be beneficial in their homebuying journey.
