As home prices continue to rise in Canada, the dream of home ownership is getting further out of reach for Canadians. New data shows the undeniability as almost all Canadians believe home ownership accessibility is a problem in Canada (96%) and nine in 10 aspiring homeowners feel locked out of ever owning a home.
Results from the Home Ownership in Canada Study, which surveyed 2,000 Canadian adults, revealed nearly half (45%) of Canadians are renting their home or live with family while the other half (55%) own their home. For those renting or living with family, four in 10 (44%) have aspirations of buying a home within the next 10 years.
Rising home prices make that a challenge. The average home price in Canada rose to $816,720 in February – a 20% increase from the previous year. Since February 2020, the average home price has increased by 50% from $542,286. Saving for the recommended 20% down payment is a barrier for more than three in four aspiring homeowners.
“Rising home prices have outpaced wages, making it impossible for Canadians to get ahead. And with rising interest rates and inflation, the affordability gap is tougher than ever to close,” explained Rob Richards, co-founder and CEO of Key. “We created Key to make the dream of home ownership a reality for people. The reality is, this crisis is a complex problem that has no single silver bullet – it requires partnership and innovation to build new pathways to home ownership.”
Key launched a co-ownership model in November 2021 to help Canadians get on the property ladder sooner by removing the two biggest barriers that keep most people from owning. The tech-enabled model provides an opportunity to co-own a home to live in and build equity from day one, with a small down payment of 2.5 percent of the home’s value, and without having to take on a mortgage. Key aligns real estate investor capital with resident capital to underwrite the cost of home ownership, making it more affordable for residents.
Canadians are looking at this as a potentially attractive solution – in the survey when informed about Key’s co-ownership model, an overwhelming 90% of Canadians felt it would make home ownership more accessible. Moreover, seven in 10 Canadians believe co-ownership is a better solution than rent-to-own models for making home ownership more accessible and affordable.
“Since launching, we’ve had more than 5,000 Canadians join our wait list that continues to grow each week,” shared Daniel Dubois, co-founder and president of Key. “In order to build a more equitable path forward for Canadians, we need private capital, supply partners and government support to shape solutions to address the growing home ownership crisis.”