More and more young buyers are seriously considering making purchases with friends or loved ones, according to a recent report.
An RBC online poll of 2,000 users revealed that nearly 25 per cent of Canadian millennials would buy a property with a friend, and 24 per cent would consider getting a home with a family member. To compare, last year’s numbers for these segments were 11.7 per cent and 14.7 per cent, respectively.
The survey’s proponents pointed at ever-growing prices and insurance premiums as the main factors driving the phenomenon.
“Particularly in some of the larger markets in Canada, affording that first home or condo is increasingly more challenging,” RBC vice president of home equity finance Erica Nielsen said, as quoted by The Canadian Press
Shared purchases don’t compel the parties involved to live together, but industry experts advised those who are willing to enter into such an arrangement to tread carefully.
“Your name and your credit file is attached to that debt, so if the partner you are purchasing with loses their job or something happens and they can’t make their part of the mortgage payments ... that’s going to impact you, as well,” financial coach Chantel Chapman warned.
“There are going to be points in time where things might not be amazing, and you need to account for that,” Chapman said, adding that it’s best for the co-buyers to work with a lawyer to come up with a document that would outline fair cost divisions and contingencies.