A recent report has stirred up the age-old debate: Is it better to rent or buy a house in Canada? The study, conducted by a real estate website, examined 26 markets nationwide to shed light on this pressing question.
With rent prices on the rise and mortgage rates on the decline, many Canadians are pondering whether now is the time to make the leap into homeownership. The report, released earlier this week, aimed to provide clarity in this uncertain landscape.
To compare the financial implications of renting versus buying, Zoocasa, the real estate agency behind the study, established certain assumptions for consistency. They utilized average rent prices from Rentals.ca, focusing on new lease listings from December. For mortgages, Zoocasa assumed a 20 percent down payment and a fixed five-year rate of 4.84 percent over a 25-year period.
The analysis found that in Winnipeg, owning a home turned out to be cheaper than renting, with a monthly mortgage payment slightly lower than the average rent. Similarly, Regina and Quebec City came close to tipping the scales in favor of homeownership, with only a slight difference between mortgage and rent payments.
However, in most Canadian markets such as Vancouver, Toronto, Surrey, B.C., Burlington, Ont., and Calgary, renting emerged as the more affordable option. Zoocasa noted that higher costs associated with owning a home can indirectly impact the rental market, leading to increased rents as landlords strive to cover mortgage payments.
Despite the findings, experts caution that the decision to buy or rent is not straightforward for many Canadians, particularly due to the challenge of saving for a hefty down payment. Carolyn Whitzman, a housing researcher at the University of Ottawa, highlights the significant barriers young Canadians face in accumulating funds for homeownership, particularly in the face of escalating housing prices.
In addressing Canada's housing crisis, Whitzman emphasizes the need for comprehensive solutions that make renting more affordable and tackle the root causes of inflated housing prices. With an aging population and changing housing dynamics, she stresses the importance of reevaluating existing policies to ensure housing affordability for all demographics.
Ultimately, the report underscores the complexity of the housing market in Canada and the need for multifaceted approaches to address affordability issues and provide viable housing options for Canadians of all ages.
