More home buyers turn to co-owning to afford property in Canada

It’s no secret buying a home can be tough in Metro Vancouver, and it’s forcing more people to get creative and look at non-traditional arrangements.

A survey from Royal LePage suggests many are choosing co-ownership with family, friends, or others.

As the cost of living has soared, home prices have remained high, and as interest rates have gone up, a large number of co-owners say they made the decision to share because of a lack of affordability.

“We have three top reasons for why people are buying in this manner,” said Royal LePage Chief Operating Officer Karen Yolevski. “The number one reason was affordability. Over 70 per cent said I would not be able to afford the property I purchased without purchasing with a co-owner.”

That number is even higher among certain demographics.

“If you look at people between the ages of 25 and 34, it’s over 80 per cent. So overwhelmingly it appears to be an affordability issue. After that, it is about the type of property,” she told CityNews.

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Close to 40 per cent of survey respondents indicated they chose co-owning to be able to afford a larger home or a property in a more desirable neighbourhood.

“Thirdly, it’s the reason we may typically think about for co-ownership — the multi-generational family living together either to care for elderly parents or to have adult family members in the home who can look after younger children,” said Yolevski.

Whatever the reasons, Yolevski explains realtors across the country have noticed an uptick in the number of homebuyers purchasing a property with people other than their spouses or significant others.

The survey suggests that segment of buyers now makes up six per cent of property co-owners.

More than half of those say they co-own with parents or parents-in-law but 15 per cent are braving co-ownership with siblings.

Seven per cent surveyed say they bought a house with a friend, and eight-percent bought with someone who is neither family nor friend.

For many, co-ownership means cohabitation, too — almost half say they all live under the same roof — and Yolevski says that can be complicated.

“We encourage people to seek legal help with this type of arrangement. It involves lots of money, it involves property and it can be hard to undo,” she said.

“You’re going to want to work with someone to put together a contract where you can spell out exactly the financial obligations of each party, what would happen if one party couldn’t meet those obligations, and how the property will be sold.”

She adds the day-to-day obligations of running the property should also be spelled out very clearly before you take ownership of the property.

“There’s maintenance, there’s yard work, there are repairs that may need to be done. If it’s a property that’s used recreationally, there could be things such as stocking the fridge when someone leaves or keeping it in a tidy condition. You’re going to want to spell out the rules of engagement around your ownership with that partner so you don’t end up in arguments down the road.”

Co-owning a home can also come with meaningful lifestyle changes, and Yolevski says all of it requires in-depth conversations with your partners.