Quote:
Originally Posted by Cowboy89
Why not rent indefinately until prices reflect owning as a cheaper option?
Right now that's actually a better financial option in most Canadian markets. The rental costs vs. owning costs have rarely been this cheap in Canadian history. The hypothetical young adult in question here might actually get more utility now a days out of paying half as much to live in the same style of property while not being tied down by a mortgage. They might actually have room in the budget to save money for their RRSP and TFSA. Seems to be that the more 'common' the sense of building equity through home ownership became the less 'sense' it made.
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I live in Vancouver, the most overpriced market, and it still makes more sense economically to own. I bought my first condo about a year ago. I pay 950/month in morgtage plus 250/month maintenance. The condo rents for $1,300-$1,500/month.
In 35 years (assuming I don't accelerate), I will own the condo outright. Plust it is likely to go up in value, or at the very least move with inflation.
If you can get the downpayment togethre and know you are going to live in a place for a long time, it always makes sense to buy.
Edit: Should add, as interest rates are low, about $450 a month is going into principle.