In this video interview, Samantha Villiard, Regional Vice President, RE/MAX Canada, discusses a new report indicating young Canadians are seeking alternative ways to buy homes in the country due to higher interest rates, the price of housing and the high cost of living.
PRESS RELEASE
TORONTO, Feb. 27, 2024 /CNW/ — 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 per cent), 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 per cent).
A new RE/MAX report titled Alternative Home Ownership Models: Trends in the Canadian Housing Market 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.
“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 per cent down,” says Christopher Alexander, President of RE/MAX Canada.
According to Leger research commissioned by RE/MAX in late 2023, the majority of Canadians believe home ownership is the best investment they can make (73 per cent). This sentiment has remained consistent with a 2022 survey, indicating that despite economic turbulence, Canadians still see value in home ownership.
“With high interest rates plateauing, and potentially lowering in the latter half of 2024, now may be a good time to consider getting into the market, especially for those who have been taking a ‘wait-and-see’ approach,” says Benjamin Tal, Deputy Chief Economist of CIBC World Markets Inc. “Despite some interest rate reprieve in 2024, Canada is still dealing with an affordability crisis due to a lack of inventory and increasing demand, which will persist until the country addresses the problem adequately. Considering this, creative solutions like co-ownership may be an option for many Canadian home-buyers looking to achieve the dream of home ownership.”
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 home-buyers, 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 per cent of Canadians would consider purchasing a home using an alternative model. Among Canadians, 22 per cent would purchase under a rent-to-own scenario; 21 per cent would consider co-ownership with a family member that isn’t a spouse or partner; and 17 per cent 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 per cent). Of those who are open to this idea, the