With housing prices in Metro Vancouver flying ever-further out of reach for local incomes, real estate professionals say an increasing number of families are pooling resources to get into the market.
Co-ownership — facilitated by the so-called “mixer mortgages” promoted by banks and credit unions such as VanCity — allows families or friends to own and live in the same residence.
Co-ownership is not new in Vancouver. But with average detached home prices surging to $2.5 million and “runaway” prices increasingly “divorced” from local incomes as Mayor Gregor Robertson said this week, it makes sense that more people are reportedly looking at these financing arrangements.
According to VanCity, which has promoted shared ownership financing since 2006, the new mortgage product was developed as increasing numbers of Vancouver residents inquired about sharing homes with family, friends and roommates.
Real estate lawyer Richard Bell, who advises clients on preparing co-ownership agreements, says the majority of agreements involve parents and adult children dividing and living in shared property. He says over the past year he’s seen a big increase in families entering such agreements and he expects the trend to increase. Vancouver’s new zoning of laneway houses is also boosting the co-ownership trend, he said. In fact Bell and his wife co-own a property with his Millennial daughter and her husband, with both couples living in duplex-like units. Bell also plans to rent out a laneway house on the property to a third party.
Experts at VanCity caution that co-ownership isn’t comfortable for everyone and deals can be stressed through disputes, deaths or divorces.
Real estate lawyer Randy Klarenbach told Vancouver’s Real Estate Weekly magazine that he strongly cautions his clients against jumping into co-ownership, because so much can go wrong when un-related parties are involved.
“Bottom line, it’s a huge financial risk,” he said.
However Bell says that his firm believes they have devised legal packages that can cover the difficulties that arise among non-related co-owners.
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