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Gig economy affecting housing demand

October 25, 2018

A “phenomenal” increase in Canadians doing contract or freelance work is affecting home plans and projects—even how homes are financed.
Statistics Canada estimates that 2.18 million Canadians are taking part in some form of temporary work—a number that has risen significantly since the 2008 recession. About 15 per cent of Canadians are permanently self-employed.
“The gig economy in Canada is growing at a phenomenal rate that shows no signs of slowing down,” a study from BMO states. “An on-demand, freelance or contingent workforce is becoming the norm.”
The gig economy could “disrupt and transform” the housing market in the near future, according to Montreal-based Supilov, a real estate website.
The blurring of live-work boundaries are affecting the kinds of homes buyers want, especially as more people work remotely or are self-employed, according to the report. This creates a need for work spaces in the home, whether that’s home office space or a live-work unit. Added to that need is an increased desire for homes—or spaces within homes—that can be rented out as short-term rentals on websites such as Airbnb.
“Builders are seeing more demand from the self-employed – who prioritize loft-like spaces that easily convert into home offices and workspaces – and Airbnb hosts – who prioritize socially focused architectural design such as open-concept living spaces and common areas, as well as smart security technology,” wrote the report authors. Remote working also means that there is less of a need to live close to downtown cores, and buyers may choose to gain more space in homes further away from urban hubs.
In recognition of the growing gig economy, Canada Mortgage and Housing Corp. (CMHC) has made it slightly easier for the self-employed to qualify for mortgages. The changes—now in effect—primarily cover borrowers putting down less than a 20 per cent down payment on a home, and those putting down more than 20 per cent but who have default insurance as required by the lender.
Previously, it was challenging for self-employed borrowers who had been self-employed for less than 24 months. Now, their application can be considered using additional criterion, such as whether the business they acquired was “established,” as well as their cash reserves or predictable earnings, CMHC explained.


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