More first-time buyers in Edmonton are looking to multi-generational housing, teaming up with downsizing parents, so they can afford to purchase a single-family detached home.
While parents helping adult children with a down payment has been commonplace in recent years, more are considering this alternative approach to address affordability challenges, says Don Patterson, managing partner and broker at Re/Max Excellence in Edmonton.
“Affordability is a major driver as a multi-family home allows them to share housing costs.”
Multi-generation homes are a compromise purchase for a growing number of first-time buyers seeking a single-family detached home, finding themselves otherwise priced out of this segment of the housing market in Edmonton.
In January, the benchmark price of a single-family detached home was more than $508,000, up 0.5 per cent from the year before, statistics for the Realtors Association of Edmonton show.
Considered the typical price of home in the city, the benchmark is increasingly unattainable for young families, says Patterson.
Statistics Canada suggests higher home costs are fuelling multi-generational housing. It notes that about one in five homes in Canada with more than one dweller are multi-generational homes. As well, the federal government introduced a tax credit in 2022 to help with the cost of renovations to create a multi-generational home — modifications that include separate basement suites and ones built over the home’s garage, Patterson says.
Another trend fuelling demand is aging parents who are downsizing and using the proceeds to help their children acquire a single-family home.
Rather than moving to a condominium apartment, duplex or townhome, they upgrade to a larger footprint for a single-family home with, for example, a separate basement suite. Often, the adult children and grandchildren live on the main floors, while the aging grandparents live in the basement suite, Patterson says.
“The end result is lower costs” for both parties. Other advantages include grandparents being closer to their grandchildren and providing child care, he adds.
Edmonton realtor Nathan Mol with Liv Real Estate has also seen more clients looking for multi-generational homes, and one challenge has been a lack of choice.
“The number of people in each generation of the family often impacts the housing type, location and size (of the home) they are looking for,” he says, noting other key factors include accessibility for the aging parents.
Mol says one multi-generational trend has been modifying basements of older homes into separate suites with existing owners leveraging the tax credit to help cover the costs. These homes often have wider appeal, attractive to buyers seeking to rent the suites to help pay for the mortgage, he says.
Many new infill homes also have these suites, as do larger dwellings in newer suburbs. Many new builds in the higher price ranges even have walkout basement suites, he adds.
Other new homes may not have separate suites, but they have infrastructure (i.e. plumbing) to accommodate a suite in the future, Mol says.
Another trend for new single-family homes is more price friendly for buyers while leaving the door open for a future suite, Patterson says.
“I was talking to a major builder just the other day, saying they now add side entrance doors to new homes in case new owners want to add a basement suite,” he says.
“That’s a really nice feature in today’s market because it offers more flexibility for buyers.”