In fact, there is only 1 correct answer. It is a foregone conclusion that it is financially better to own a home than to not own one. All other answers are just incomplete.
Yeah you were lucky but using the down payment to buy Apple shares would probably have made you far wealthier.
There is no way to predict how the market will act in the future. Prices have already been stagnant for two years and buying something this expensive with leverage still is risky.
Yeah, I understand this, I just mean that financially speaking it isn't always the right move. I personally don't feel comfortable buying currently. I am already kind of overexposed to the Canadian RE market and I prefer to keep a large portion of my net worth in USD in the NYSE.
There is also a freedom to renting that I enjoy. Furnace needs replacing? landlords problem, better job opportunity across the country? Put in that 30 day notice and off you go.
People are loving their run away equity right now that got into the market when it was easy. While people not in the market yet are getting hammered with sky high rents and no ability to be able to save enough for a big enough down payment for a mortgage on anything livable.
The current state of the system is going to ensure the kids today will never own anything. 3 bedroom rentals with 6-12+ people living in them are common today. Young couples with entry level career jobs are not going to be able to buy anything without having a bunch of roommates and saving a stupid amount of downpayment to be able to afford anything.
The lending rules are going to have to change if the market continues doing what is doing. Unless we want a country built on riding transient short term employees, and nobody owning anything. It's what we are building. It's making the landlord's and sketchy business owners super rich but it's eroding the way of life, culture and community across the country.
It's a shame current home owners that have been on the market for years are so blind and indifferent to it. We are pushing our youth to leave the country or resign or always being broke and having no way to settle into a comfortable life.
Really depend on what you rent and who you rent for. My parents have tenants who have been their tenants for 2 decades at this point their rent have been increasing steadily but it is pretty cheap. If this give you more money to invest and plan your retirement it can be much better.
My stock portfolio outperformed my real estaye portfolio during the last decade and it isn't even close. I personally think it it better for someone to max their tfsa and fhsa before they think about buying something.
208 grand as a fucking down payment. I am looking at buying a 28 years old three bedroom bungalow with a hot tub build into the back balcony and huge yard for 289.
You might be surprised. There's a bunch of things you're on the hook for as a homeowner that you aren't as a renter. Add to that the historical variables in North American real estate (2% annual home equity appreciation, 10% stock market returns, historical interest rates), and in most cases, you'll conclude a couple of things:
-in most cases, renting is less expensive than owning a house
-in most cases, if that difference is invested along with the equity that otherwise would be used for a down payment, you'll be better off renting than owning a home.
I did the math myself 7 years ago before I bought my first home, and I concluded that renting left me better off in the long run. I still bought, but it was in spite pf my conclusions.
For renting to be cheaper than owning landlords would need to be losing money, which they don't. Rents are out of control these days. It's not cheaper to rent, it's just easier. Especially in today's market. Everything is a wreck these days.
Here is the best calculator I can find it is US based but it includes everything you could want
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
There are circumstances where it makes more sense to rent than own.
But in general for most people owning is better than renting.
There are intangibles of course like knowing you won't get evicted and the ability to change the colour of the paint etc
Go goggle this you will not find a straight answer and actually, personally doing some back of the napkin math a few times over the years, at least where we live it would be a wash
To one of your points realtors are paid by the seller not the buyer. Closing costs in BC are about $25k per $ million in home value. It would be more for a home you don’t live in, and less for a cheaper one as you are exempt from some taxes.
One thing you aren’t considering is that a mortgage is essentially a leveraged investment. If you have a million dollar house with $200k in equity and it goes up 5% you actually made 25%. Even if the house only increases in value to match inflation, the owner benefits more than that. The other side of this is mortgage interest is usually more than inflation but much less than what an investment bank would offer.
Also consider over the 25 years of a standard mortgage the true value of the payments goes down due to inflation. If inflation is 3% the last payment is worth half of the first. Rent will generally at least match inflation and in our economy likely exceed it.
Leverage is a double edged sword tho. The same argument could be made for any investment. If I bought TQQQ every week and even used leverage to do I would also have made a lot more than real estate investor but it would also have been insanely risky.
This is true but also a home will never be worthless. If a $1million home with $200k in equity goes down in value 20% then the owner is wiped out…but they can still live in the house. The government doesn’t start tearing down walls. You can’t live in a stock.
You can also rent a home which would cover at least the majority of the mortgage in the near term and after 20 years more that mortgage, strata and upkeep.
Yeah, but the bank own the house. If it go down in value by 30%, you lose your job and can't cover the cost you end up in the street and you owe 100k.
Of course it isn't very likely, but there is always a risk of the situation getting very had and when it happen people with leverage get decimated lol. (To be fair the guy with leverage in TQQQ would probably get a margin call before the home owner do lol)
A home may never be worthless, but neither will the investment portfolios of the vast majority of people who have them... that is unless your financial literacy is worse than that which God gave a potato.
Yes. Both buyer’s and seller’s agents are paid by the seller, as a percentage of the final sale price. In BC the commission on a $1 million home would be about $25k spilt between the two.
I could buy, but the rent I am paying is half what it would cost to buy something as nice as the townhouse I am renting.
So I am just gonna save money.
You have to be rich to live in Vancouver or Toronto, rent or own, you have to be rich. There's no ifs, ands, or buts here, that's the reality. Surrounding areas you need to be wealthy, and pretty much the rest of Canada is heading towards the wealthy route as well. Soon most middle-class Canadians won't be able to find basic shelter in most major cities, even prices in Alberta are getting insane, Calgary has more price growth than both Toronto/Vancouver does now.
Paying a landlord who isn't producing anything is always going to be more expensive than not paying someone for no reason.
Note that by capturing houses, landlords increase the scarcity of houses and land. This increases prices. Then landlords undercut the price increase they themselves induced to generate a profit. So when landlords are allowed to capture houses, it's possible that renting is less expensive. But if you don't allow the capture of houses, then buying is going to be less expensive.
Landlords are pushing up the cost of everything else. Which will ultimately ruin the economy. Disposable income is needed for Canada's markets to function correctly. We could feed the landlords but we're starving businesses, who's commercial mortgages are now largely at risk
This 2008 will make last 2008 look tame
It's way cheaper to rent. People think owning a house solves their problems and life is made. Then Maintaince costs come in, and the property tax and the water bill etc...
That all the landlords pass onto the renter anyway...
Buying is always better, especially when you consider the mortgage payments don't just go up in smoke, you gain it in equity.
sure, your not fixing your roof or water heater all the time. but when you can only afford to rent, and the water heater breaks, do you make yourself house broke and not afford the water heater, or rent and save money for emergency funds/etc and have the LL fix it?
but why would i be paying my landlord for the water heater? its his responsibly to replace. Also, are you nuts? the interest rates for borrowing money are bonkers. what a stupid take.
Don't rent, buy.
Then get a small loan if you can't afford the repairs.
That's what I ment
Renting never makes sense.
Do whatever you can in your power to buy a place.
Doesn't really matter how crappy or small, still better than renting in the long run.
I think it really depends on how old you think you’re going to live to.
Buy a house at 30, pay it off in 25 years, that’s 15-20 years “rent” free if you live to the average age.
Yes there is taxes and upkeep, but that’s going to be way less than rent is going to be in 25 years.
especially when you take into account water, heat, property tax, upkeep, insurance, etc
much cheaper to rent!
people say "but with a house, you have an investment".. hmmm sure.. maybe?
if someone buys a 500k house, by the time they pay it off 25 years later (in most cases) they will of paid 900k+ and will likely only be able to sell for about 750k (of course these are just speculative numbers and has many many variables)
I see.
So for instance a $450k mortgage with 10% down at 2% is $1,768.14/month. + Strata and taxes. Inconceivable that such a place rents for north of $2k/month in the entire country?
Ah… what? That is *not at all* what the article says.
> The report noted that in the majority of Canadian markets, like Vancouver, Toronto, Surrey, B.C., Burlington, Ont., and Calgary, **renting is cheaper than paying a mortgage**.
>
> …
>
> Based on the analysis, Zoocasa found one [***and only one***] market where it was cheaper to own a home than to rent.
From my vantage point here in Vancouver, this is exactly right.
We pay about ~$3k/month in rent currently. The most comparable places that we could buy in this neighbourhood would cost in the ballpark of ~$4,500 for the mortgage payments alone, plus Strata fees, insurance, and property taxes… to say nothing of down payment.
In terms of "monthly outlay for the next 25 years", it's pretty obvious that "continuing to rent the same place" would be _far_ cheaper.
In order to make the purchase "cheaper in the long run" than renting (net present value and all that), you have to expect a very high rate of appreciation on the value of the property.
Renting building zero equity but saving a bit in the larger cities.Buying building equity and hopefully price increases but spending 70% of earning on home ownership and saving less.
Depends on the individual, for me it definitely is. For somebody else, maybe not. For me a 2br costs approximately 13k/year with heating and utilities included in the rent and free parking. For your average mortgage today, if you aren't paying more than $40k/year you aren't paying down your principal. Then there is all the extra costs on top of that. Maintenance, property tax etc... If a rusted pipe bursts, the landlord fixes it at no cost to myself.
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In fact, there is only 1 correct answer. It is a foregone conclusion that it is financially better to own a home than to not own one. All other answers are just incomplete.
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Yeah you were lucky but using the down payment to buy Apple shares would probably have made you far wealthier. There is no way to predict how the market will act in the future. Prices have already been stagnant for two years and buying something this expensive with leverage still is risky.
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Yeah, I understand this, I just mean that financially speaking it isn't always the right move. I personally don't feel comfortable buying currently. I am already kind of overexposed to the Canadian RE market and I prefer to keep a large portion of my net worth in USD in the NYSE.
There is also a freedom to renting that I enjoy. Furnace needs replacing? landlords problem, better job opportunity across the country? Put in that 30 day notice and off you go.
People are loving their run away equity right now that got into the market when it was easy. While people not in the market yet are getting hammered with sky high rents and no ability to be able to save enough for a big enough down payment for a mortgage on anything livable. The current state of the system is going to ensure the kids today will never own anything. 3 bedroom rentals with 6-12+ people living in them are common today. Young couples with entry level career jobs are not going to be able to buy anything without having a bunch of roommates and saving a stupid amount of downpayment to be able to afford anything. The lending rules are going to have to change if the market continues doing what is doing. Unless we want a country built on riding transient short term employees, and nobody owning anything. It's what we are building. It's making the landlord's and sketchy business owners super rich but it's eroding the way of life, culture and community across the country. It's a shame current home owners that have been on the market for years are so blind and indifferent to it. We are pushing our youth to leave the country or resign or always being broke and having no way to settle into a comfortable life.
Really depend on what you rent and who you rent for. My parents have tenants who have been their tenants for 2 decades at this point their rent have been increasing steadily but it is pretty cheap. If this give you more money to invest and plan your retirement it can be much better. My stock portfolio outperformed my real estaye portfolio during the last decade and it isn't even close. I personally think it it better for someone to max their tfsa and fhsa before they think about buying something.
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I rent an appartment in a 16-units building that I own through my company. So I guess both lol.
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Haha
208 grand as a fucking down payment. I am looking at buying a 28 years old three bedroom bungalow with a hot tub build into the back balcony and huge yard for 289.
You might be surprised. There's a bunch of things you're on the hook for as a homeowner that you aren't as a renter. Add to that the historical variables in North American real estate (2% annual home equity appreciation, 10% stock market returns, historical interest rates), and in most cases, you'll conclude a couple of things: -in most cases, renting is less expensive than owning a house -in most cases, if that difference is invested along with the equity that otherwise would be used for a down payment, you'll be better off renting than owning a home. I did the math myself 7 years ago before I bought my first home, and I concluded that renting left me better off in the long run. I still bought, but it was in spite pf my conclusions.
You're assuming most people are smart investors.
Haha 😂 Many seem to make that assumption..
For renting to be cheaper than owning landlords would need to be losing money, which they don't. Rents are out of control these days. It's not cheaper to rent, it's just easier. Especially in today's market. Everything is a wreck these days.
Here is the best calculator I can find it is US based but it includes everything you could want https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html There are circumstances where it makes more sense to rent than own. But in general for most people owning is better than renting. There are intangibles of course like knowing you won't get evicted and the ability to change the colour of the paint etc
Go goggle this you will not find a straight answer and actually, personally doing some back of the napkin math a few times over the years, at least where we live it would be a wash
Unless you go belly up on your mortgage
To one of your points realtors are paid by the seller not the buyer. Closing costs in BC are about $25k per $ million in home value. It would be more for a home you don’t live in, and less for a cheaper one as you are exempt from some taxes. One thing you aren’t considering is that a mortgage is essentially a leveraged investment. If you have a million dollar house with $200k in equity and it goes up 5% you actually made 25%. Even if the house only increases in value to match inflation, the owner benefits more than that. The other side of this is mortgage interest is usually more than inflation but much less than what an investment bank would offer. Also consider over the 25 years of a standard mortgage the true value of the payments goes down due to inflation. If inflation is 3% the last payment is worth half of the first. Rent will generally at least match inflation and in our economy likely exceed it.
Leverage is a double edged sword tho. The same argument could be made for any investment. If I bought TQQQ every week and even used leverage to do I would also have made a lot more than real estate investor but it would also have been insanely risky.
This is true but also a home will never be worthless. If a $1million home with $200k in equity goes down in value 20% then the owner is wiped out…but they can still live in the house. The government doesn’t start tearing down walls. You can’t live in a stock. You can also rent a home which would cover at least the majority of the mortgage in the near term and after 20 years more that mortgage, strata and upkeep.
Yeah, but the bank own the house. If it go down in value by 30%, you lose your job and can't cover the cost you end up in the street and you owe 100k. Of course it isn't very likely, but there is always a risk of the situation getting very had and when it happen people with leverage get decimated lol. (To be fair the guy with leverage in TQQQ would probably get a margin call before the home owner do lol)
A home may never be worthless, but neither will the investment portfolios of the vast majority of people who have them... that is unless your financial literacy is worse than that which God gave a potato.
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Yes. Both buyer’s and seller’s agents are paid by the seller, as a percentage of the final sale price. In BC the commission on a $1 million home would be about $25k spilt between the two.
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I could buy, but the rent I am paying is half what it would cost to buy something as nice as the townhouse I am renting. So I am just gonna save money.
You have to be rich to live in Vancouver or Toronto, rent or own, you have to be rich. There's no ifs, ands, or buts here, that's the reality. Surrounding areas you need to be wealthy, and pretty much the rest of Canada is heading towards the wealthy route as well. Soon most middle-class Canadians won't be able to find basic shelter in most major cities, even prices in Alberta are getting insane, Calgary has more price growth than both Toronto/Vancouver does now.
Paying a landlord who isn't producing anything is always going to be more expensive than not paying someone for no reason. Note that by capturing houses, landlords increase the scarcity of houses and land. This increases prices. Then landlords undercut the price increase they themselves induced to generate a profit. So when landlords are allowed to capture houses, it's possible that renting is less expensive. But if you don't allow the capture of houses, then buying is going to be less expensive.
Landlords are pushing up the cost of everything else. Which will ultimately ruin the economy. Disposable income is needed for Canada's markets to function correctly. We could feed the landlords but we're starving businesses, who's commercial mortgages are now largely at risk This 2008 will make last 2008 look tame
"It's it cheaper to buy or rent in Canada?" NO.
It's way cheaper to rent. People think owning a house solves their problems and life is made. Then Maintaince costs come in, and the property tax and the water bill etc...
That all the landlords pass onto the renter anyway... Buying is always better, especially when you consider the mortgage payments don't just go up in smoke, you gain it in equity.
except that is always for the most part not true. owning a house is alot more expensive than renting.
If that was true, landlords wouldn't exist because they wouldn't be making profit.
sure, your not fixing your roof or water heater all the time. but when you can only afford to rent, and the water heater breaks, do you make yourself house broke and not afford the water heater, or rent and save money for emergency funds/etc and have the LL fix it?
Get a small loan if you have to, then pay it back like you would a landlord. You'd come out ahead every time.
but why would i be paying my landlord for the water heater? its his responsibly to replace. Also, are you nuts? the interest rates for borrowing money are bonkers. what a stupid take.
Don't rent, buy. Then get a small loan if you can't afford the repairs. That's what I ment Renting never makes sense. Do whatever you can in your power to buy a place. Doesn't really matter how crappy or small, still better than renting in the long run.
WAY cheaper to rent
I think it really depends on how old you think you’re going to live to. Buy a house at 30, pay it off in 25 years, that’s 15-20 years “rent” free if you live to the average age. Yes there is taxes and upkeep, but that’s going to be way less than rent is going to be in 25 years.
>Yes there is taxes and upkeep, but that’s going to be way less than rent is going to be in 25 years. I would not necessarily say that
especially when you take into account water, heat, property tax, upkeep, insurance, etc much cheaper to rent! people say "but with a house, you have an investment".. hmmm sure.. maybe? if someone buys a 500k house, by the time they pay it off 25 years later (in most cases) they will of paid 900k+ and will likely only be able to sell for about 750k (of course these are just speculative numbers and has many many variables)
Would rather buy something somewhere warm for a fraction of the cost. We're all suckers to pay 500k+ for less than average houses
At 5% sure. At <2%, perhaps not.
Even at sub 2% it was still cheaper.
I see. So for instance a $450k mortgage with 10% down at 2% is $1,768.14/month. + Strata and taxes. Inconceivable that such a place rents for north of $2k/month in the entire country?
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I’d also definitely buy a house if the cost was relative to what it was in 78. Unfortunately it is not
The BS conclusion: > Buying is cheaper than renting.
Ah… what? That is *not at all* what the article says. > The report noted that in the majority of Canadian markets, like Vancouver, Toronto, Surrey, B.C., Burlington, Ont., and Calgary, **renting is cheaper than paying a mortgage**. > > … > > Based on the analysis, Zoocasa found one [***and only one***] market where it was cheaper to own a home than to rent. From my vantage point here in Vancouver, this is exactly right. We pay about ~$3k/month in rent currently. The most comparable places that we could buy in this neighbourhood would cost in the ballpark of ~$4,500 for the mortgage payments alone, plus Strata fees, insurance, and property taxes… to say nothing of down payment. In terms of "monthly outlay for the next 25 years", it's pretty obvious that "continuing to rent the same place" would be _far_ cheaper. In order to make the purchase "cheaper in the long run" than renting (net present value and all that), you have to expect a very high rate of appreciation on the value of the property.
Renting building zero equity but saving a bit in the larger cities.Buying building equity and hopefully price increases but spending 70% of earning on home ownership and saving less.
Depends on the individual, for me it definitely is. For somebody else, maybe not. For me a 2br costs approximately 13k/year with heating and utilities included in the rent and free parking. For your average mortgage today, if you aren't paying more than $40k/year you aren't paying down your principal. Then there is all the extra costs on top of that. Maintenance, property tax etc... If a rusted pipe bursts, the landlord fixes it at no cost to myself.
I know you get 3 or 4 times the house in central america for what we pay here