Canadian house hunters are considering “alternative options” to be able to enter the country’s red hot — and largely unaffordable — real estate market.
A new report from RE/MAX exploring housing affordability across the country found that a third of Canadian homebuyers — 33% — were looking into unconventional ways to help themselves get a foot in the real estate market door.
The most popular option by far was renting out a portion of their primary residence, with 21% saying they would consider it. Thirteen percent said they were considering pooling money with friends or family to be able to purchase a home. And 7% said they were looking into living with like-minded neighbours in a co-op or shared living arrangement.
“Among prospective homebuyers, millennials and Gen Z are most likely to consider alternative regions and communities, and/or financing options to keep affordability in play,” the report reads.
Unsurprisingly, 42% of Canadians reported that the high price of real estate is a barrier to entering the market, which is 4% more than in the previous year. Other key barriers included a shortfall in salary, fear of rising interest rates, fear of being “house poor,” lack of steady full-time employment, current levels of household debt, and the mortgage stress test.
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The report broke down 16 major real estate markets across the country, ranking them from most to least affordable. Anyone looking for a great deal on a home will want to consider the St. John’s Metro area, Regina, or Winnipeg, all of which have average sale prices just above $300,000.
And it comes as no surprise that Toronto and Vancouver took the last two spots on the affordability list, with 2021 sale prices surpassing $1,000,000 while median household incomes came in below $100,000.
Going forward, to address issues of affordability, the focus will need to be on creating more supply so that competition is not so fierce among Canadian house hunters, the report says.
“The common means of solving Canada’s real estate challenges, such as the introduction of the stress test, solely addresses demand rather than finding a way to ensure there are enough homes for all Canadian,” said Elton Ash, regional executive vice president of RE/MAX of Western Canada.
“Unfortunately, we have yet to tackle the real issue behind housing affordability in Canada, which is supply. We share the RE/MAX opinion that addressing supply must be our top consideration moving forward.”