A key topic in population and urban studies is neighbourhood social relations. The topic has significant implications for the larger debate about friendship patterns in contemporary North American society. Ties among neighbours provide social support, foster social relations, and facilitate social capital. Our study explores how the exchange of favours among neighbours, a key component in developing and maintaining social relations among neighbours, is related to co‐ethnic proportion, length of time in the neighbourhood, and family life cycle. Our discussion differentiates between relations within groups and overall relations in the neighbourhood. We merged the 2008 Canadian General Social Survey with 2006 Canadian census tract data to explore these issues. The findings present an optimistic view of a diversified society. Most members of the groups included in the analysis experience favour exchange with neighbours. Although co‐ethnic proportion and duration in the neighbourhood do not relate to favour exchange in neighbourhoods for minorities and immigrants, these factors are significant for local‐born population. In addition, as minorities and immigrants marry, their family needs may encourage them to develop social relations with neighbours. Copyright © 2015 John Wiley & Sons, Ltd.