TORONTO — When Jeremy Campbell purchased a house in Ladner, B.C., with his sister and her husband in 2010, it was meant to be a temporary arrangement until he could upgrade to a place of his own.
"The initial plan was to do this short term just to get into the market, build some equity ... get my foot in the door,'' says Campbell, who covered one third of the down payment on a 2,000 square-foot home that's split into two suites.
But with home prices in the Lower Mainland's red-hot real estate market soaring, Campbell says they're thinking of staying put.
"We'll invest in the house to expand it versus selling and going our separate ways,'' says Campbell, noting that a renovation is needed to accommodate the growing family, which now includes his fiancee, their new dog and his three-year-old niece.
Experts say an increasing number of first-time homebuyers are contemplating arrangements like Campbell's as sky-high prices in markets such as Toronto and Vancouver have eroded affordability.
Young Canadians look to family and friends for housing help
A recent RBC poll found that roughly one in four millennials would consider purchasing a home with a friend — up from only 11.7 per cent the previous year.
The number of young buyers who would consider going in on the purchase with a family member was 24 per cent, up from 14.7 per cent in 2015, the survey said.
"Particularly in some of the larger markets in Canada, affording that first home or condo is increasingly more challenging,'' says Erica Nielsen, vice-president of home equity finance at RBC.
In addition to higher prices, premiums for mortgage default insurance have risen, presenting an additional obstacle for first-time buyers, Nielsen adds.
A home for some, an investment for others
The online survey of 2,000 Canadians was conducted by Ipsos on RBC's behalf between Jan. 28 and Feb. 4. The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.
While many co-purchases involve both parties living together in the home, that isn't always the case.
When Richard Wiebe bought a $340,000 two-storey house in Toronto's east end with a close friend in 2012, they each paid half of the down payment and agreed to split the cost of all of expenses and any capital gains when they sell.
But only Wiebe lives in the home. For his friend, the transaction is purely an investment.
"I consider him my platonic husband because we own a house together,'' quips Wiebe.
"It's an awesome way to get into the market sooner without having to find 'The One.'''
"I consider him my platonic husband because we own a house together." — Richard Wiebe
Experts caution that such arrangements come with risks.
"When you purchase an asset together, it's basically like starting a business together,'' says Chantel Chapman, financial fitness coach at online lender Mogo Finance Technology.
"There are going to be points in time where things might not be amazing, and you need to account for that.''
Chapman recommends working with a lawyer and drafting up a written plan that outlines everything from what happens if one party wants to sell to how the cost of repairs will be split.
"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,'' says Chapman.
Also on HuffPost:
"At my open house, the male neighbour next door [was] tanning nude in the backyard. Not discovered until we stepped into the back deck and....well...then there was nothing left to discover." — Phil, a top agent on the North Shore
"When selling my own home, I cleaned thoroughly only to return — post-showing — to my nail clippers out and a stranger's nails in my sink." — Jack Bernard, Vancouver
"In a developer's presentation centre, a buyer used the display bathroom — which had an open ceiling to the centre — for number two. He struggled and was audibly not enjoying it." — Jack Bernard, Vancouver
“One of my agents and I were out with buyers showing them a number of investment properties in my previous market of Sarasota, Florida. Upon entering one 'handyman special,' we were greeted by animal bones and odd markings. Once we got to the living room, we discovered that someone had broken into the home and performed voodoo ceremonies — complete with altar, stones, voodoo dolls, and more bones. Needless to say, the buyer passed on that particular investment." — Bret Calltharp, business development Specialist for Metro Vancouver Properties (RE/MAX)
"People that lift up toilet seats to look under them. What do they expect to see?" — Shawn Anderson, RE/MAX, Vancouver
"The couple next door with the curtains open while enjoying each other vigorously. The buyers thought it nice that people got along in the neighbourhood, but that perhaps (as proven) it might be a bit loud for them and their children." — Phil, a top agent on the North Shore
"A ghost." — Angie, Metro Vancouver realtor
"One seller's decor had coffee cups on everything, including curtains, cupboards, and each individual tile. On our second meeting, I brought them coffee, but they turned it down — as they don't drink coffee." — Jack Bernard, Vancouver
"On occasion (though not recommended), it's OK when people leave a very small, friendly, and cute dog home while having an open house. However, as I was walking a couple through the home, the fluffy little dear decided to show her disapproval on the living room carpet as we entered the room. Clearly, she was not ready to move." — Phil, a top agent on the North Shore
"I was on tour with some buyers in West Van. The listing realtor, who was related to the seller, met us at the property to unlock. He told us to go in and he'd be out in the garden making some calls. The house appeared almost vacant, just a few pieces of furniture around. We went upstairs into one of the bedrooms and turned the lights on — there was an elderly woman sleeping in the bed. My client screamed at the top of her lungs and then the woman in bed started screaming too. My client was so shocked she ran all the way out and got back in the car. I asked the other realtor why he didn't mention someone was there, he said he didn't think we'd notice his tiny Gramma sleeping and she's a deep sleeper so didn't think she'd notice us...wrong!" — Ian Eggleton, Re/Max, North Shore and Downtown Vancouver
"A buyer and I went to a 400 sq.-ft. studio near Collingwood. We arrived early to familiarize ourselves with the area and waited outside for the listing agent. The broker ran awkwardly up to the home and rushed to the elevator and hurried us up to the suite. Once inside he immediately ducked into the bathroom. Due to the small size, the buyer and I finished our viewing in a few moments. There was a long and uncomfortable few minutes where we sat in silence waiting for the listing broker to finish up. We heard an exasperated sigh and flush, he leaned out of the bathroom and said quite excitedly 'Hey, you guys have to come check out these renovations in here!' A quick no thanks, a lot of laughter and we avoided the amenity viewing and decided to move on. One of my more memorable showings and one we still laugh about." — Jack Bernard, Vancouver