Get the RE/MAX Canada newsletter
EXPERT EVALUATION
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).
RE/MAX 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. Here are the findings.
Canadians' desire to enter the housing market prompts new trends in co-ownership, rent-to-own and rental-unit scenarios.
Search listings
Source: A survey of 1,522 Canadians was completed by Leger on behalf of RE/MAX Canada, between January 19 and January 22, 2024, using Leger's online panel. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size (1,522) would yield a margin of error of +/- 2.5 per cent, 19 times out of 20. *This statistic was derived from a separate Leger survey conducted in late 2023.
regional market insights
Read the report
Alternative Home Ownership Models
in the Canadian Housing Market
Necessity is the Mother of Invention. Economic conditions are compelling young Canadians to explore alternative ways to achieve their dream of home ownership.
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.
Christopher Alexander
President, RE/MAX Canada
Deputy Chief Economist,
CIBC World Markets Inc.
Benjamin Tal
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 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.
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 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,” 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 majority (59 per cent) believe working with a realtor who could advise on how to navigate the non-traditional purchasing journey would be beneficial.
According to the Leger survey, 13 per cent of current homeowners purchased a home in a non-traditional way. Demographically, young (aged 18-34) homeowners (25 per cent), and BIPoC Canadians (27 per cent) are significantly more likely to have purchased their home using an alternative method. Likewise, young (aged 18-34) Canadians (70 per cent), BIPoC Canadians (72 per cent), and Canadians with children under 18 (71 per cent) who would consider non-traditional homeownership but are not sure what the process would entail, are more likely to agree that working with a licensed realtor who specializes in non-traditional home ownership situations would be beneficial in their homebuying journey.
RE/MAX Canada brokers and agents across the country provided insights into non-traditional home-buying trends in their local market. According to the network, 71 per cent of regions surveyed noted a slight uptick in non-traditional home-ownership situations.
RE/MAX brokers and agents in Vancouver, Victoria, Kelowna, Calgary, Edmonton and Winnipeg, have reported income/secondary suites, joint tenants, and tenants in common as the most common non-traditional home-ownership models[1], however, secondary suites are the most popular choice among homebuyers in 2024. Kelowna is an outlier and listed reverse mortgages as its second most common alternative ownership model. Secondary suites are used to generate income by renting to a tenant, or for intergenerational housing. More affordable cities in Western Canada, such as Saskatoon, Regina, and Nanaimo are not observing the same trends.
In Edmonton and Winnipeg, increased immigration has sparked an uptick in homebuyers seeking properties with secondary suites and intergenerational accommodations. By comparison, in more expensive markets such as Vancouver, Kelowna and Victoria, brokers and agents are reporting a growing popularity of income suites for income potential or to mitigate mortgage costs. In Vancouver, many buyers who purchase a home with a secondary suite are doing so for additional income to help with mortgage costs. Victoria is also experiencing an increase in co-ownership with friends or family within the last two years due to high prices.
This trend is anticipated to continue in Western Canada markets, with areas experiencing the biggest influx of newcomers from out of province and internationally seeing the biggest shift toward non-traditional ownership models. For instance, Winnipeg is anticipating an increase of between 10 to 12 per cent of first-time homebuyers entering non-traditional home ownership setups, whereas Victoria is anticipating an increase of only two to five per cent.
[1] For the purposes of this report, “Joint tenants,” is defined as “each party owing an equal part of the property, commonly when spouses or partners purchase a property together,” and “Tenants in common,” is defined as “a sub-type of co-ownership, each owner owns an undivided part of their property and can pass their share on to heirs.”
Western Canada
Ontario
In Atlantic Canada, some RE/MAX brokers have reported an increase in joint tenants, co-ownership/co-equity and a rise in in-law suites as a way to earn additional income. In Moncton, NB and Halifax, NS, a lack of inventory is ongoing, resulting in buyers becoming more creative in how they purchase homes and the type of home they short-list. In November 2023, the City of Moncton proposed a $10,000 grant for those adding a basement apartment, garden suite or second housing unit on a residential lot, which may further encourage residents who are considering secondary suites. Similarly, Halifax has seen greater flexibility from the municipal government for the development of secondary suites.
Charlottetown, PEI has also seen an uptick in buyers entering non-traditional forms of home ownership, with income/secondary suites, followed by co-ownership/co-equity and rent-to-own being some of the most common forms in the region.
Affordability is factor driving alternative home ownership trends in Halifax. According to the RE/MAX network, families and friends purchasing homes together and living together has been trending as a way to mitigate costs. The trend is expected to continue and potentially increase in 2024, due to current inflation and interest rate climates.
Brokers in Moncton, NB, and Halifax NS are anticipating seeing approximately five to 15 per cent of buyers enter non-traditional home ownership situations in 2024. In Charlottetown, the expectation is five to 10 per cent.
Due to the relative affordability of St. John’s, NF, non-traditional home ownership is currently not a trend in the region.
Atlantic Canada
Ongoing affordability and supply issues, coupled with increased migration, have caused non-traditional home-ownership models to increase over the last year in markets such as London, Toronto, Brampton, Mississauga, Sudbury, Hamilton-Burlington and Oakville. According to RE/MAX brokers, the top three non-traditional home-ownership models are tenants in common, secondary suites and joint tenants.
In London, Brampton and Mississauga, homebuyers are increasingly searching for properties with secondary suites to accommodate intergenerational households. In London, parents commonly purchase homes with their children to operate as an intergenerational family unit and assist with childcare and household expenses. By contrast, in Mississauga and Brampton, which are experiencing an expanding immigrant population, secondary suites are intended to accommodate extended family members or to generate rental income to support the costs of growing extended families.
According to the RE/MAX network, sales data in the Hamilton-Burlington-Oakville region that looks at ownership composition has many agreements with multiple names on purchases, meaning there are likely a variety of instances of joint ownership. Multi-generational buyers have also increased in the region, anecdotally, by approximately 300 per cent over the last five years. This is especially prevalent among families, with co-ownership or shared equity among parents and/or even grandparents. Likewise, these regions are seeing an uptick in reverse mortgages, especially among older residents to either get the property they want or use the funds in another investment.
In cities such as Brampton, Mississauga and London, municipal governments have recognized the benefits of secondary income suites and have implemented supportive policies to encourage their development through streamlined approval processes and relaxed zoning restrictions.
Brokers reported the number of Canadians entering non-traditional homebuyer situations in markets like London, ON and Toronto, ON, is anticipated to increase between eight to 10 per cent, and in Mississauga and Brampton, it could be as high as 35 per cent with a five per cent year-over-year increase moving forward.
Like Western Canada, while multi-generational living is on the radar in more affordable Ontario cities, such as Ottawa, the number of buyers is minimal. Independent living is still affordable in Ottawa, and the region is attracting more young families than its more costly counterparts.
Advice for homebuyers
Research realtors, lenders, lawyers and mortgage brokers with experience in non-traditional home ownership agreements. Get informed on the benefits and drawbacks of non-traditional home-ownership models before you start your buying journey.
Research, research, research.
Non-traditional home-ownership models often include different tax impacts and benefits. Consult a tax professional and weigh the taxes you may or may not be subjected to prior to entering into any non-traditional models of home ownership.
Understand the tax implications.
Structure your rent-to-own agreement and the monthly payments such that the lender will accept it to fund a mortgage utilizing that as your down payment in the future. This is the most common way that rental buyers lose their money, sometimes negligently by the seller or landlord, and sometimes intentionally setting them up to fail to keep their cash.
Do your due diligence.
While demand has increased for secondary suites, and this type of property may offer income benefits, RE/MAX brokers caution buyers that these suites do come with barriers to entry, specifically timing. It may take owners a while to break even on the income potential of secondary suites.
It's not "one size fits all."
Find an agent
RE/MAX brokers and agents in Vancouver, Victoria, Kelowna, Calgary, Edmonton and Winnipeg , have reported income/secondary suites, joint tenants, and tenants in common as the most common non-traditional home-ownership models*, however, secondary suites are the most popular choice among homebuyers in 2024. Kelowna is an outlier and listed reverse mortgages as its second most common alternative ownership model. Secondary suites are used to generate income by renting to a tenant, or for intergenerational housing. More affordable cities in Western Canada, such as Saskatoon, Regina, and Nanaimo are not observing the same trends.
In Edmonton and Winnipeg, increased immigration has sparked an uptick in homebuyers seeking properties with secondary suites and intergenerational accommodations. By comparison, in more expensive markets such as Vancouver, Kelowna and Victoria, brokers and agents are reporting a growing popularity of income suites for income potential or to mitigate mortgage costs. In Vancouver, many buyers who purchase a home with a secondary suite are doing so for additional income to help with mortgage costs. Victoria is also experiencing an increase in co-ownership with friends or family within the last two years due to high prices.
This trend is anticipated to continue in Western Canada markets, with areas experiencing the biggest influx of newcomers from out of province and internationally seeing the biggest shift toward non-traditional ownership models. For instance, Winnipeg is anticipating an increase of between 10 to 12 per cent of first-time homebuyers entering non-traditional home ownership set ups, whereas Victoria is anticipating an increase of only two to five per cent.
*For the purposes of this report, “Joint tenants,” is defined as “each party owing an equal part of the property, commonly when spouses or partners purchase a property together,” and “Tenants in common,” is defined as “a sub-type of co-ownership, each owner owns an undivided part of their property and can pass their share on to heirs.”
Ongoing affordability and supply issues, coupled with increased migration, have caused non-traditional home-ownership models to increase over the last year in markets such as London, Toronto, Brampton, Mississauga, Sudbury, Hamilton-Burlington and Oakville. According to RE/MAX brokers, the top three non-traditional home-ownership models are tenants in common, secondary suites and joint tenants.
In London, Brampton and Mississauga, homebuyers are increasingly searching for properties with secondary suites to accommodate intergenerational households. In London, parents commonly purchase homes with their children to operate as an intergenerational family unit and assist with childcare and household expenses. By contrast, in Mississauga and Brampton, which are experiencing an expanding immigrant population, secondary suites are intended to accommodate extended family members or to generate rental income to support the costs of growing extended families.
According to the RE/MAX network, sales data in the Hamilton-Burlington-Oakville region that looks at ownership composition has many agreements with multiple names on purchases, meaning there are likely a variety of instances of joint ownership.
Multigenerational buyers have also increased in the region, anecdotally, by approximately 300 per cent over the last five years. This is especially prevalent among families, with co-ownership or shared equity among parents and/or even grandparents. Likewise, these regions are seeing an uptick in reverse mortgages, especially among older residents to either get the property they want or use the funds in another investment.
In Ontario cities such as Brampton, Mississauga and London, municipal governments have recognized the benefits of secondary income suites and have implemented supportive policies to encourage their development through streamlined approval processes and relaxed zoning restrictions.
Brokers reported the number of Canadians entering non-traditional homebuyer situations in markets like London, ON and Toronto, ON, is anticipated to increase between eight to 10 per cent, and in Mississauga and Brampton, it could be as high as 35 per cent with a five per cent year-over-year increase moving forward.
Like Western Canada, while multi-generational living is on the radar in more affordable Ontario cities, such as Ottawa, the number of buyers is minimal. Independent living is still affordable in Ottawa, and the region is attracting more young families than its more costly counterparts.
In Montreal, a lack of inventory paired with affordability issues has caused an uptick in buyers looking toward non-traditional methods of home ownership in order to be able to access the market. This trend is expected to continue.
When homebuyers in Montreal do opt for non-traditional purchasing models, the most common forms include co-ownership/co-equity, tenants in common, and income/secondary suites. Secondary suites specifically, are becoming more popular, but according to the RE/MAX network, present legislation must be amended to make these suites more accessible to the general population.
Due to ongoing affordability challenges in the area, it’s anticipated that Montreal could see a 10- to 15-per-cent increase in homebuyers exploring alternative solutions that allow them to engage in the housing market in 2024.
montreal
In Montreal, a lack of inventory paired with affordability issues has caused an uptick in buyers looking toward non-traditional methods of home ownership in order to be able to access the market. This trend is expected to continue.
When homebuyers in Montreal do opt for non-traditional purchasing models, the most common forms include co-ownership/co-equity, tenants in common, and income/secondary suites. Secondary suites specifically, are becoming more popular, but according to the RE/MAX network, present legislation must be amended to make these suites more accessible to the general population.
Due to ongoing affordability challenges in the area, it’s anticipated that Montreal could see a 10- to 15-per-cent increase in homebuyers exploring alternative solutions that allow them to engage in the housing market in 2024.
Atlantic Canada
Vancouver Island
Vancouver
Kelowna
Calgary
Edmonton
Winnipeg
Sudbury
Toronto & East GTA
read more:
Mississauga & Brampton
Hamilton & West GTA
London/St. Thomas
Ottawa
Montreal
Moncton
Halifax
Toronto & East GTA
Mississauga & Brampton
Hamilton & West GTA
London/St. Thomas
Ottawa
Montreal
Moncton
Halifax
Vancouver Island
Vancouver
Kelowna
Calgary
Edmonton
Winnipeg
Sudbury