TORONTO — Affordability is the top reason cited among Canadians who opted for co-ownership with family members and friends, according to a new Royal LePage survey.
The survey, published Thursday, revealed six per cent of respondents co-owned their property with people who weren't their significant other. Of those, 76 per cent cited affordability as the top reason, followed by the need to buy a bigger property.
In the online survey, conducted by Leger between Aug. 10 and Aug. 21, 89 per cent of those co-owned homes were purchased with a family member, seven per cent with friends and eight per cent with someone who is not a friend or family.
Co-ownership has existed for years, mostly driven by necessities such as help with raising children or supporting parents or grandparents in a multi-generational setting, said Karen Yolevski of Royal LePage Real Estate Services Ltd. in an interview.
That seems to be changing, she said. The historical, family-related reasons for multi-generational homes took third spot on the list of reasons for co-ownership.
Higher borrowing rates are making it harder for young families to qualify for mortgages and people are increasingly turning to family members for help buying a home, she said.
Forty-four per cent of co-owners lived with people they bought with together. A single-family detached home was the most common type of home purchased, according to the survey.
Realtors are seeing the shift on the ground as well, Yolveski said.
"It's a trend that's come about primarily from the affordability of homes, and we're starting to see this materialize in terms of transactions."
In a previous Royal LePage survey, 23 per cent of real estate professionals said they have seen a jump in the number of homebuyers opting for co-ownership compared to pre-pandemic times.
While the common examples could be parents helping their adult children by co-signing a mortgage,Yolveski said there also is a pool of people looking for properties to make investments and join forces with someone else to increase their purchasing power.
That could include owning recreational property, such as cottages and cabins.
"People are making decisions to purchase (those properties) to be able to use them as frequently as they want, but not take on the entire amount of cost or burden," she said.
But that may not be true for all homebuyers.
While the survey wasn't broken down geographically, Yolveski said co-ownership may bean attractive option in an expensive real estate market, including Toronto and Vancouver where people are finding it harder to qualify for mortgages without a co-owner.
Co-owning a property with friends or family is not simple, she noted, and requires a lifestyle change and in-depth conversations over financial, legal and personal obligations.
"The key is going to be setting up a contract that protects both sides," she said. "It should clearly spell out everyone's financial obligations, maintenance obligations as well as what will happen if the property needs to be sold."
This report by The Canadian Press was first published Aug. 31, 2023.
Ritika Dubey, The Canadian Press