One-third of Canadians considering alternative home ownership models amid low affordability
One third of Canadians are considering alternative home ownership models, a new survey has found, as purchasing a home remains out of reach amid an ongoing affordability crunch.
According to a survey conducted by Leger on behalf of Re/Max Canada, 32 per cent of Canadians are exploring non-traditional ways of entering the housing market. The most common alternatives, according to Re/Max, include rent-to-own scenarios, home ownership with someone that isn’t a spouse or partner, and renting out part of the home.
The survey also found that 48 per cent of Canadians said they would consider purchasing a home using an alternative model in the future. Of those, 22 per cent would consider buying a home through a rent-to-own scheme, 21 per cent would consider co-ownership with a family member who isn’t a spouse or partner, and 17 per cent would consider buying a home intending to live in the dwelling and rent out part of the home to someone else.
The push to consider alternative home ownership models comes amid extremely low affordability housing in Canada. Higher interest rates, strained housing supply and surging population growth have resulted in stubbornly high home prices, as well as rising rents across the country.
While home buying may be out of reach for some, and economic conditions have weakened amid higher interest rates, the survey found that the majority of Canadians (73 per cent) still believe home ownership is the best investment they can make.
“Canadians’ interest in home ownership remains unchanged, despite economic challenges, rising interest rates, inflation and negative headlines,” Re/Max Canada president Christopher Alexander said in an interview with Yahoo Finance Canada.
“We’re seeing emerging trends, especially in our most expensive cities and provinces, where people are looking at alternatives to get into the market. That to me is another signal that people are willing to try different things, because they believe in the value of home ownership.”
The survey also found that 13 per cent of current homeowners purchased their home using an alternative model. That figure was higher among young Canadians between the ages of 18 and 34 (25 per cent) and Black, Indigenous and people of colour (BIPOC) respondents (27 per cent.)
"Affordability is really the main driver and I don't expect that to change so long as we're facing a high cost of living," Alexander said.
According to insights from Re/Max brokerages, 71 per cent of regions across the country reported a slight uptick in non-traditional home ownership situations. In Ontario, for example, non-traditional home ownership models have increased over the last year in cities such as London, Toronto, Brampton, Mississauga, Sudbury, Hamilton-Burlington and Oakville. Atlantic Canada has seen an increase in co-ownership models, with Halifax, N.S. seeing an increase in families and friends purchasing homes together and living together to mitigate costs. In Western Canada, brokers in Vancouver, B.C., Victoria, B.C., Kelowna, B.C., Calgary, Alta., Edmonton, Alta., and Winnipeg, Man., said income or secondary suites were the most common non-traditional home ownership model.
The survey of 1,522 Canadians was conducted between Jan. 19 and Jan. 22 using Leger’s online panel. There is no margin of error with the survey, but a probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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