Vancouverites faced with soaring house prices consider co-ownership
Posted February 16, 2020 5:46 pm.
Last Updated February 16, 2020 8:33 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) — A new strategy is emerging for those looking to buy into the red hot Vancouver real-estate market: buying a house with several other people.
Realtor Noam Dolgin specializes in private co-ownership and finding pieces of property suitable for multiple families to live in.
“With the rise in costs in real estate and the growing sense of isolation in society, people have realized that by coming together and buying property together they can both save money and actually afford to get into the market,” he explains.
A group of people buy together, sharing the cost based on the square footage each of them will be living in.
For example, a Mount Pleasant home listed at $1.78 million may be out of reach for a solo buyer. But it’s already been divided into four suites. If four people or families split the cost, each would be paying $400,000 and $500,000 for a home of their own in one of the city’s most desirable areas.
Co-ownership between friends and family has become more common in hot markets such as Vancouver and Toronto.
A recent RE/MAX ledger survey found Vancouver to be the least affordable region in Canada with an average sale price of $1.19 million
Dolgin says there are some risks to co-ownership, but they can be planned for and managed.
“First off we go in there with a similar timeline. So, the expectation would be going in with a five to 10 year timeline or a 15 to 20 year timeline so that we know in advance that someone’s not just going to walk away and upset the cart,” he says.
“You meet with a lawyer to develop a partnership agreement, at the end of the day a partnership agreement is key. If you’ve addressed many of the questions and concerns in advance you don’t have to worry about them at the inevitable time when you want to go your separate ways.”
The biggest risk involved is having a co-owner who is unable to pay their share of the mortgage which could result in everyone losing their home and being liable for the balance.
Dolgin says this scenario is rare, but it’s why he recommends a strong partnership agreement and a realtor familiar with co-ownership arrangements.
