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Economic challenges prompt Canadians to explore non-traditional paths to homeownership: Re/Max

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A recent survey commissioned by Re/Max Canada reveals that economic factors such as the high cost of living, soaring interest rates and housing prices are prompting one-third of Canadians to seek alternative routes to homeownership (32 per cent). The survey, conducted by Leger, also found that nearly half of Canadians are considering non-traditional methods of buying a home for the future (48 per cent).

The findings are part of a new report by Re/Max, Alternative Home Ownership Models: Trends in the Canadian Housing Market, which analyzed 22 cities across Canada. The report delved into various non-traditional homeownership models, including co-ownership with friends and family, rent-to-own arrangements and purchasing properties with additional units or suites for income potential.

 

Many Canadians “seriously consider(ing) alternative ways to get their foot in the door”

 

“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.

The research found that the majority of Canadians still view homeownership as the best investment (73 per cent), echoing sentiments from previous years despite economic uncertainties.

Benjamin Tal, deputy chief economist of CIBC World Markets Inc. weighs in: “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.

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 homebuyers looking to achieve the dream of home ownership.”

 

“Our governments must be more strategic and visionary in how we can use existing lands and real estate”

 

Models of non-traditional homeownership signify a shift in the concept of owning a home, traditionally associated with individuals or couples.

“But creativity in the home-buying process is a workaround, not a solution to Canada’s affordability crisis,” notes Alexander. “Like modern, innovative homebuyers, 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.

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.”

 

Potential alternatives: Rent-to-own, co-ownership and offering rentals

 

The survey also revealed specific preferences among Canadians considering alternative homeownership methods: 22 per cent expressed interest in rent-to-own scenarios, while 21 per cent would consider co-ownership with a non-partner family member. Additionally, 17 per cent would explore purchasing a home to become the primary tenant and rent out part of the property.

Despite the openness to non-traditional homeownership, nearly half of Canadians are unsure about the process. Among them, a significant majority (59 per cent) believe that working with a realtor specializing in non-traditional homebuying journeys would be beneficial.

 

Young and BIPoC homeowners more likely to have used alternative methods

 

Key demographic insights from the survey show that young homeowners (aged 18-34) and BIPoC Canadians are more likely to have purchased their homes using alternative methods. Similarly, young Canadians, BIPoC individuals and those with children under 18 who are considering non-traditional homeownership but are unsure about the process see the value in working with specialized realtors.

 

Check out the full report, including regional market insights.

 


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