Priced out? Many Canadians are using these "non-traditional" ways to become homeowners
Canada is getting more and more expensive, and that means aspiring homebuyers are getting priced out of the housing market.
This challenge has led to more Canadians getting creative and looking into alternative ways to own a home.
A new Leger survey commissioned by real estate company Re/Max shows that 13% of homeowners in Canada purchased their homes using non-traditional means, while 32% are looking into it, and 48% said it’s something they’d consider in the future.
“Canadians from coast to coast are grappling with affordability challenges, but at the same time, their desire to achieve home ownership remains strong,” said Christopher Alexander, president of Re/Max Canada.
“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 percent down.”
The three popular options are rent-to-own programs, co-ownership, and rental properties.
Despite the growing popularity, Alexander noted that these are simply workarounds and not a solution to Canada’s affordability crisis. Instead, it’s up to the government to create “a cohesive, national housing strategy” to address the affordability and supply crises.
According to the survey, groups most likely to explore alternative ways to own a home are those between 18 and 34 and BIPOC Canadians.
Here are the top three rising trends in Canada among those considering non-traditional routes into the housing market and, ultimately, home ownership.
Rent-to-own programs
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Commonly referred to as lease-to-own, 22% of Canadians said they’d choose this path to homeownership. The program allows you to rent a home for a specific period, usually an average of three to five years, according to a post by Re/Max. At the end of the lease, you’ll have the option to buy the home.
“Once the lease ends, the occupant who is renting can buy the property by obtaining a mortgage after having accumulated the down payment through the rental payments,” states the post.
Co-ownership
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Seventeen percent of survey participants are open to buying a home with family or friends (not a spouse or partner). According to Re/Max, joint ownership allows people to enter the housing market by sharing the up-front and ongoing costs of owning a home.
“Entering into co-ownership can be a great way to enter the housing market and start building equity,” reads a post.
Rental property
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Seventeen percent of those who participated in the survey said they would consider buying a rental property. As the homeowner and primary tenant, they can rent out a part of the home for additional income.
“Rental properties can provide investors with the constant cash flow that they need to succeed as a distinguished investor,” stated a Re/Max post.
Would you consider these non-traditional routes to buying a home? Let us know in the comments.
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