Renting vs. Buying: What’s the Best Choice for Canadians?

Commentary Canadians seem overwhelmed by the state of the economy in general and housing costs in particular. Rents have soared to levels that would have seemed incomprehensible only a few years ago. Although house prices have declined somewhat over the last two years, increases in mortgage rates have led to an increase in monthly payments. Putting aside the question of “pride of ownership” issue, people have always had to ask themselves whether it was financially better to buy or rent. This question is not as obvious as one might think. Depending on the average income of Canadians, as well as house prices and interest costs at any time, the percentage of the population that can even entertain buying a house varies dramatically. Right now, saving for a 20 percent down payment and carrying a mortgage, given the after-tax income of average Canadians, effectively makes home ownership impossible for most young people. This is especially true if they live in Toronto or Vancouver. ...