Slicing up the house market: Can fractional ownership take off?

Skyrocketing prices have some looking at another way into real estate

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Toronto is so expensive, the old saying could become “fractional home sweet home”.

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Affordability in the GTA has reached such stratospheric levels, it has led to the early beginnings of a novel  way for some buyers to get at least a small slice of an endlessly surging market.

“It’s astronomical.  It is very high, very high.  There are obviously a lot of concerns around affordability,” said Simon Mills who rents in Toronto but decided to buy a “fraction” of a house in Hamilton.

The very new idea comes from a company called BuyProperly which helps people buy a portion of a property rather than the whole thing.

Simon Mills, a renter in Toronto who bought a fraction of a Hamilton home. Supplied
Simon Mills, a renter in Toronto who bought a fraction of a Hamilton home. Supplied

“It’s crazy unaffordable, so this felt like a way to get in and get a piece of the action a little bit” said Mills who — since May — has been part owner of a small Hamilton house.

“Affordability is definitely part of it.  I rent and I don’t really have any plans to own —  at least in Toronto or in the GTA anytime soon.”

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The minimum price to get in: 2500 dollars.

The house is rented out as an investment for the fractional owners.

These are early days but founder Khushboo Jha is hoping she is on to a good idea.

“A lot of them would want to invest in real estate but they just cannot,” said the former Amazon employee who started her business in 2019. “That’s the biggest problem.  Millennials like myself and GenZ we feel completely priced out.”

Khushboo Jha  CEO and founder of BuyProperly. Supplied
Khushboo Jha  CEO and founder of BuyProperly. Supplied

And those prices are stunning.

Monday the Canada Real Estate Association releases its latest monthly survey of average homes prices across Canada.

It was $686,650 in September 2021, up 13.9 percent from a year earlier.

“The issue is that demand/supply conditions are stabilizing in a place that very few people are happy about,” said Cliff Stevenson, Chair of CREA in October’s snapshot.

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“There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging.”

Toronto Region Real Estate Board figures show the average selling price for all homes  rose 19.3 percent year-over-year in October to a whopping $1,155,345.

Those eye-popping prices are so challenging,  young buyers are seeking any way to try to take advantage.

Even if it means having only a slice.

“I was earning.  I was saving.  And I was still struggling,” said Jha. “If people who are having decent earnings are struggling,  there needs to be new creative ways of solving this situation.”

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