With many Canadian homeowners facing a sharp rise in mortgage payments, many of them have decided to bail, resulting in the highest number of Toronto housing units for sale in more than a decade and signaling a big drop in prices in the coming months. In Toronto, a city where two-thirds of the country's condominiums are sold, considered a bellwether for other big metropolitan areas, inventories have pushed past highs reached 10 years ago, data showed. Rising inventories with anemic sales show a high degree of stress in Canada's biggest property market, real estate consultants said.
I’d like to see the math on this, please. A family friend who works in investments does claim the exact diametric opposite, and I’ve seen things from time to time that rather support that. If you know otherwise I’d love to read what you’ve read.
I’m only eyeballing graphs, but from this one, a Toronto detached house in 1999 was roughly $300k, and today it’s roughly $1.7m. That matches about a 7% annualized rate of return. A document from S&P Global says the TSX index has grown at an 8% annualized rate.
A house you buy as an investment might slightly lag behind an investment in an index fund. But, if you have to pay rent because you’re not living in your investment house-purchasing seems to win by a long shot.
You are ignoring maintenance, tax and other “running” costs that have to be paid to own and live in your own house.
I am a homeowner and while I intially agreed with you out of instinct, if you figure that monthly rent should be thr equivalent to property taxes, maintenance and whatever utilities are included in the rent the big push I’m favour of home ownership is the fact that you don’t pay capital gains on a primary residence. In the above example, an investment gaining $1.4M in value would have (Ontario) taxes of around $350k… So it really depends on whether the house being considered is a primary residence or not.