A recent TD Bank survey showed that while a quarter of first time home buyers did so on their own there is a growing trend of buying a house as a group. In fact four out of 10 people surveyed think that buying property with friends or family members is a great way to get started.
Vacation property was the more common group purchase, but now there’s a shift towards non-traditional ways of buying a primary residence.
Tenants in common
Pooling resources with compatible friends and/or family members could give buyers more house than going on their own. They may also be able to make a larger down payment on their purchase, thereby avoiding mortgage insurance if they can put down 20% or more, resulting in significant savings.
It’s becoming popular with young, single professionals, siblings, and single parents who share not only costs but also childcare, meals, and household responsibilities.
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This type of arrangement can be more complicated than simply being roommates in a rental. It requires careful planning to avoid potential future problems and buyers need to agree on such things as down payment, budget, and maintenance.
Starting in the 1970’s, the wave of new immigrants entering Canada resulted in many of them looking for homes that could accommodate their large extended families under the same roof. This is a staple housing type in many countries and a cultural preference.
Goodnight Grandpa. Goodnight John-boy
Those who remember the TV show “The Waltons”, or even “The Beverly Hillbillies” know that multi-generational households – grandparents, parents, and grandchildren – were quite common up to the early 1900’s, especially in rural areas. Prior to World War II almost one quarter of households were blended. This was how families used to take care of their oldest members.
Now these several-generation households are again on the rise. Family structure is evolving in some ways back to how families used to live. According to Statistics Canada, the number of grandparents living with grandchildren jumped 45% between 2001 and 2011. The driving force is changing demographics.
The Sandwich Generation
You would expect Boomers to start downsizing their homes, but instead they are moving their elderly parents in with them. Plus the wave of “boomerang kids” moving back in with their parents for financial reasons is again creating the three-generation household.
Mother-in-law suites have been popular for a while, but now some homebuilders are offering multi-generational configurations in their new designs to accommodate this lifestyle.
One of my former co-workers had a house built specifically for himself, his wife, daughter, son-in-law, and two grandchildren with two master bedrooms and separate living and eating areas. Everyone can spend quality time together as a family as well as have privacy and independence.
While this trend is not skyrocketing in popularity just now, there is a clear niche for this type of property and the demand may continue to increase.
Communal living definitely is not for everyone, but it can be mutually beneficial. Multi-generational homes can promote positive experiences and benefits:
- Grandparents and grandchildren can develop a stronger bond.
- Parents have peace of mind knowing grandparents are not alone.
- Cost sharing is appealing if mortgage payments and other household expenses are high.
Families (and friends) may be coming together because of the economy, but they are staying together because it works.
Could this be the way of the future?