Canadians are increasingly open to different ways of becoming homeowners, but a new report suggests builders are having trouble delivering the lower-cost homes buyers need.
New research commissioned by Meridian Credit Union, Ontario’s largest credit union, found 62 per cent of Canadians would consider non-traditional housing options, including modular, prefabricated or tiny homes. Half specifically view those housing types as a viable path to homeownership.
Meanwhile, 79 per cent of builders surveyed said there is a mismatch between what the industry is building and what Canadians need, according to Meridian Housing Attainability Report, which is based on surveys of 1,500 Canadians and 250 construction industry members.
Buyers show willingness to adapt
Affordability appears to be driving some of that openness to different forms of housing.
Purchase price was a consideration for 89 per cent of consumers surveyed, while 84 per cent pointed to monthly carrying costs.
The report also considers alternatives beyond the physical form of a home, including co-ownership and rent-to-own arrangements, as well as purpose-built rental and missing middle housing as ways to expand attainable supply.
At the same time, nearly half of construction businesses surveyed said they have seen increased client interest in unconventional, prefabricated or modular housing.
“Canadians are showing us that homeownership is no longer one-size-fits-all,” said Jay-Ann Gilfoy, CEO of Meridian. “From co-ownership arrangements to modular housing and rent-to-own models, people are adapting to today’s realities and looking for new ways to achieve their housing goals.”
Young Canadians keep an open mind, with many relying on family
The survey found 78 per cent of Gen Z believe buying a home on their own is out of reach for people their age. As a result, many are exploring options that rely on shared ownership, family support and alternative pathways into the market.
The data shows that 26 per cent of those in their 20s are exploring co-ownership with friends or family, while 29 per cent are looking at rent-to-own arrangements. As well, family support remains important, with 30 per cent of those Canadians relying on it for a down payment.
Builders face financing and cost pressures
The other side of the report points to a construction industry struggling to translate that demand into new housing.
While 47 per cent of builders reported growing business demand, 60 per cent said high construction costs have made it difficult to deliver affordable starter homes in a way that’s economical for them.
Financing is another obstacle. Sixty-three per cent of builders identified securing project financing as a major challenge to housing development, while 62 per cent cited rising material costs and 52 per cent pointed to economic uncertainty.
“Builders are seeing demand for alternative housing options and new forms of homeownership, but bringing those projects to market isn’t always straightforward,” said Jason Teal, VP of business banking at Meridian. “Many construction businesses continue to face financing pressures, labour shortages and rising costs that make it harder to deliver the attainable housing Canadians are looking for.”
Skilled-trades shortage particularly high at larger firms
Labour presents another constraint. Skilled-trades shortages affected 78 per cent of construction businesses surveyed.
Among companies with 100 or more employees, that figure climbed to 94 per cent, suggesting the labour constraint remains significant even among firms with greater capacity to build at scale.
The research also found a disconnect between consumers and financial institutions. Seventy-three per cent of Canadians surveyed said they believe their financial institution does not understand the housing challenges they face.
Meridian says improving housing attainability will require greater access to project financing, more skilled tradespeople and support for alternative housing models, along with collaboration among governments, lenders and the construction industry.
