More than half of Canadians planning to buy their first or next home within two years would consider a multi-generational property, as affordability concerns influence homeownership plans, according to a new RBC survey.
The bank's latest Home Ownership Poll found that 53 per cent of prospective buyers would consider purchasing a home with family members, while 44 per cent of all respondents said they would consider the arrangement. Among current homeowners, 35 per cent said they would sell their existing property and buy one with their child to help them enter the housing market.
The findings also point to changing expectations around the timing of homeownership, the type of property first-time buyers want and the financial pressures facing homeowners approaching mortgage renewals.
Affordability drives interest in shared homeownership
The survey found that 34 per cent of prospective buyers believe multi-generational living is becoming more common because of housing affordability, while 32 per cent consider it a practical way for families to manage housing costs. Another 26 per cent said the arrangement is more a necessity than a choice.
Among all respondents, 39 per cent cited affordability as a reason for the growing prevalence of multi-generational living, 32 per cent viewed it as a way to manage costs and 30 per cent said it was driven more by necessity than choice.
"Canadians are finding new ways to make one of life's biggest purchases possible," said Janet Boyle, senior vice-president of home equity finance at RBC. "For many families it means doing it together by pooling funds to buy a home sooner and sharing costs. What's easy to overlook is that buying together isn't just a mortgage decision. It touches everyone's longer-term financial plans, from future purchases and tax implications to what happens when it's time to sell or pass the home on. Those conversations are much easier to have at the start, and getting holistic advice can make them simpler."
First-time buyers expect to enter market later
The poll found that 74 per cent of respondents believe buying a home today is more complicated than it was for previous generations. Meanwhile, 65 per cent said previous generations do not understand the challenges facing today's buyers, and 52 per cent believe homebuying advice from older generations is no longer accurate.
Current homeowners reported buying their first home at an average age of 29. Non-homeowners, by comparison, expect to be 41 on average before entering the market, while half said they do not know when they will be able to buy.
The survey also found that 74 per cent of first-time buyers planning to purchase within two years want a home they can keep for longer rather than one they may outgrow. Among existing homeowners, 52 per cent said moving to a more expensive home has been harder than expected, while 46 per cent said buying a larger or different property is not financially realistic at present.
"Buying a home you can stay in longer usually means stretching your budget further, so the math has to work in both directions," said Brad Evjen, senior mortgage specialist at RBC. "We look at what a larger purchase does to the monthly payment against what moving up in five years would cost. For some, the bigger first home is the better decision. For others it isn't, and it's worth knowing which of those two scenarios fits your situation before you start looking."
Buyers divided over when to purchase
Prospective buyers also reported competing concerns about the direction of home prices. Half said they worry that waiting to buy could leave them priced out if prices rise, while an equal proportion said they are concerned about purchasing now and seeing prices fall afterward.
"Canadians are trying to make one of life's biggest decisions in a complex market, and that's genuinely difficult," Boyle said. "What matters most is focusing on what you can control: what you have for a down payment, what you're comfortable covering month-to-month and what you want the home to do for you over the next several years. Those are the questions worth working through with a mortgage advisor early in the home buying journey."
Mortgage renewals add financial pressure
The survey also found that 51 per cent of homeowners whose mortgages are due for renewal within two years consider the process almost as stressful as buying their first home.
Interest rates were a major concern, with 82 per cent worried about rate increases in the coming year. Another 60 per cent expected their next renewal to put pressure on household finances, while 42 per cent wished they had begun preparing earlier. Among respondents facing renewal within two years, 84 per cent said having the right advice makes a significant difference.
RBC's survey also outlined potential considerations for homebuyers and homeowners renewing their mortgages. It said buyers purchasing with parents or other family members can apply jointly as co-borrowers, with lenders assessing their combined incomes, debts and credit histories. Each co-borrower remains responsible for the full mortgage, and their names appear on the property's title.
The bank also illustrated the potential impact of higher borrowing costs at renewal. On a $478,000 mortgage with a 25-year amortization, a fixed rate increasing from two per cent to five per cent would raise the monthly payment from $2,024 to $2,631, an increase of about $600.
RBC said homeowners can consider options such as lump-sum payments, increasing regular payments or adjusting their amortization, mortgage term or payment frequency to help manage renewal costs.