Canada's real estate industry is adapting to a new trend on the rise in the market: multi-generational living. Given the challenges of today's rising home prices, more Canadian families are looking for creative housing solutions.
Tim Sirianos, owner of downtown Toronto-based Re/Max Ultimate Realty, said the trend is evident in his market and will continue to impact the real estate industry for years to come.
“Housing affordability, or the lack thereof, is definitely encouraging people to consider multigenerational living. We're seeing it in areas where we've never seen it before,” he explains. “Homes that were once single-family homes are now getting additions, finished lower floors, and two- or three-unit homes where families can live together.”
An apartment building with an unconventional layout
Plus, upscale neighborhoods tend to build larger homes with more than one unit, and sometimes as many as three, he noted.
“With today's housing prices, this is definitely something a lot of families will consider. In the past, there has been talk of mommy and daddy's bank helping their kids. Perhaps mommy and daddy's bank would renovate their existing home so they can live together, rather than helping them buy a separate home. That way it would not only help the aging parents, but the younger generation as well.”
Sirianos points out that people looking at these listings might not realize they're multigenerational. Instead of a traditional single door at the front of the home, there might be two double doors alongside a bay window: one door leads straight to the upper floor, and the other leads to the main and lower levels.
He said builders are starting to build homes with this in mind. “Builders are contracting specifically for this. They're not going to go out into the market and build normally. At this point, they're contracting for the most part for this,” Sirianos added.
“There are builders I know who are specifically building those types of opportunities for people, but it's not the luxury housing market, it's the so-called 'missing middle' market.”
Multigenerational housing shortage: finding a solution
Richard Mariani, sales and marketing manager for Countrywide Homes, said there weren't enough homes properly designed for multigenerational living because most land wasn't suitable for such a layout.
“But we feel this is something the market has been asking for, and the feedback from our sales team is that a lot of buyers are coming in here and want to upgrade their home to a bigger home. Maybe their in-laws or parents are older and have an older home, so they sell both homes and buy one from us. We allow them to do that with certain options,” Mariani says.
The construction company recently broke ground on Sora Vista, a new community in Vaughan that addresses some of the housing challenges and encourages multigenerational living with fully customizable floor plans.
“Finding solutions requires us and our buyers to think differently.”
The trend toward multigenerational living is driven by challenges in today's market due to rising interest rates in recent years, which has limited what people can afford to buy. “Finding a solution requires us and buyers to think differently,” Mariani says.
For example, homes built with high ceilings offer buyers more square footage and increase the possibility of a finished basement to accommodate multigenerational living. A side door entrance and separate staircase leads directly to the basement from a garage mudroom or a side entrance to the home.
“We try to educate and explain to buyers that we're not just selling a house. This is a very valuable asset for everyone. Everybody needs a place to live. You can put two families together, make it economically viable and generate extra income. We try to make sure everyone benefits here,” Mariani adds.
He explains that costs haven't changed – materials, labour, etc. – so they are constantly being inventive and thinking of innovative ways to provide housing for people.
“Many immigrants start their lives in this country by living together. This is nothing new. People come to this country live with family or friends until they save enough money and then they all work and get a job. We are trying to give people opportunities in this country, regardless of where they come from. We want to provide them with housing and make it as affordable as possible by coming up with new and creative building solutions.”
Forty-nine percent of people who live with a co-owner bought together because they couldn't afford it alone.
Karen Yorevski, chief operating officer at Royal LePage Real Estate Services, noted that the company conducted a 2023 Co-Ownership Survey that found that multigenerational households are now the fastest growing household type in Canada.
“This is a growing trend,” she says.
According to the survey, 56% of co-owners own their home with their parents or parents-in-law, and 18% co-own with their adult children. This doesn't mean they all live together, just that in some cases they live together for financial support.
Jorevski said the survey found that 49 per cent of people living with a co-owner did so with a third party because they couldn't buy on their own. “We've always seen multi-generational cohabitation, especially in Canada. It's very common, especially in some cultures, for multiple generations to live together,” she noted.
“Because of home prices and the difficulties that first-time homebuyers, especially, face when entering the housing market — it's very hard to save up a down payment, purchase prices are very high and qualifying for a mortgage can be difficult — we're going to continue to see people make this decision based on economics. So economics will continue to be the driving force behind multigenerational cohabitation.”
Jorevski believes there will also be more variety in co-ownership arrangements: “In addition to parents and children living together, we will see more friends investing in property together, siblings investing in property together. We will see more different household formation patterns.”