A tough housing market could revive multigenerational homes, poll suggests

A recent poll conducted by the Royal Bank of Canada reveals that Canadians facing the housing market may be inclined to live in multi-generational homes to afford a home. The poll found that over half (53 per cent) of prospective homebuyers are willing to consider living in a multigenerational home within the next two years. However, this enthusiasm is not reciprocated by current homeowners, with only 35 per cent saying they would sell their home to buy one with their children to help them enter the market.

The high cost of housing drives this trend, with 34 per cent of prospective buyers citing affordability as a reason for embracing multi-generational living. An additional 32 per cent deem it a "smart way" for families to manage housing costs. However, only a quarter (26 per cent) of prospective buyers would opt for a multigenerational home out of choice rather than necessity.

Traditionally, homebuyers are advised to start with a starter home before progressing to a larger property. Yet, today's buyers are increasingly skipping this step. The average prospective buyer anticipates purchasing their first home at age 41, which is significantly older than the age (29) many current homeowners bought their first home. Instead, 74 per cent of prospective buyers expressed a preference for purchasing a home they can stay in longer rather than one that would outgrow them.

Brad Evjen, a senior mortgage specialist at RBC, suggests that buyers should weigh the impact of a larger purchase on monthly payments against the cost of moving up in five years. Some may find that a bigger first home is the better decision, while others may not. It is crucial for buyers to determine which scenario aligns with their circumstances before embarking on their home search.