According to the RBC Annual Home Ownership Poll
- Young buyers are almost twice as likely to consider purchasing a home with a family member (24 per cent versus 13 per cent for the general population) and almost three times as likely the general population to purchase with a friend (24 per cent versus nine per cent of the general population.)
- Millennials are showing a marked increase in intent to buy a home, with 43 per cent of 18 to 24 year olds saying that they are considering purchasing a home in the next two years, up from 34 per cent in 2015
- Seventy-six per cent of young Canadians believe that home ownership is a very good/good investment.
MORE MILLENNIALS PLANNING HOME PURCHASE, MORE LIKELY TO CONSIDER BUYING WITH FRIENDS OR FAMILY
- One-in-four young prospective home buyers in Canada are considering purchasing a home with a friend
- Across the country, intent to purchase a home is up 4 percentage points over 2015
- Thirty-six per cent of Canadians say choosing the right property is the biggest challenge when purchasing a home
Millennials are showing a marked increase in intent to buy a home, with 43 per cent of 18 to 24 year olds saying that they are considering purchasing a home in the next two years, up from 34 per cent in 2015, according to the 23rd Annual RBC Home Ownership Poll. Young buyers are also significantly more likely to consider purchasing a home with a family member (24 per cent versus 13 per cent for the general population) or with a friend (24 per cent versus nine per cent of the general population). Seventy-six per cent of young Canadians believe that home ownership is a very good/good investment.
“For many millennials, home ownership is a natural part of their journey and we’re seeing the next generation eager to get into the market, even if that means exploring alternate options like buying with family or a friend,” says Erica Nielsen, vice-president, Home Equity Finance, RBC. “Whether purchasing on your own or with a partner, stress-test your mortgage to ensure affordability so you’re prepared, no matter what life throws your way.”
More Canadians planning home purchase within the next two years
The poll showed that 29 per cent of Canadians are considering purchasing a home within the next two years, up 4 percentage points over 2015. People living in BC, Alberta and Ontario are most likely to be considering a purchase.
Regional comparison: percentage of Canadians considering a purchase within next two years
Buyers looking for the right fit
To get closer to the goal of owning their ideal home, buyers are taking more steps to ensure they are prepared. One-third (34 per cent) of first time homeowners looked at more than 10 homes in the purchase process. Buyers are taking the time to find the right property as 36 per cent of buyers say this is their biggest challenge, followed by 22 per cent who say that deciding how much they can afford is the most difficult factor.
“Buying a home is often about compromise and home buyers should go into the process with a clear picture of their absolute must-haves,” says Nielsen. “Set your priorities but be realistic and flexible. All parties should be on the same page, know their needs and get the best property for everyone’s lifestyle.”
Erica Nielsen offers the following tips to home buyers considering purchasing with a friend or family member:
- Get on the same page: Open the dialogue on your absolute must-haves. There will likely be some different items on each of your lists so work together to come up with one list that you can both agree on.
- Stress-test for affordability: Try out different financial scenarios to see how much you can really afford. Talk about what would happen if one of you lost your job or had a change in financial circumstances, and come up with a plan.
- Get it on paper: Create a simple agreement that outlines your arrangement including what costs each party are responsible for, and don’t forget utilities, maintenance and moving costs. You both might agree on how to handle the home purchase in theory, but life and relationships change, so having a contract in writing is key to solving disputes going forward.
- Have an exit strategy: Include in your agreement how you will deal with the property if one party would like to sell.