ight PropertyNews
Friday, July 15, 2011
Renting Vs. Owning
Categories:Community
When I was younger and the Vancouver housing market not quite so scalding, the truly intelligent among us drained their bank accounts in order to put a down payment on a home, choosing to pay monthly mortgage payments rather than monthly rent payments. The logic in this choice was infallible . The payments were very often similar, depending on where or what you decided to buy or rent, and while the initial mortgage pre-approval process was stressful – not to mention the sudden lack of funds after the down payment – it was all well worth the result of eventually owning your very own piece of property.
Now, however, this logic is less certain. Housing prices are up, making that original down payment substantially larger and increasing monthly mortgage payments as well. As well many investors who purchase homes don't necessarily live in them, increasing the number of rental units available. The rule
of supply and demand dictates that rent prices, therefore, should hold steady, if not decrease. And of course, looking at the current prices of homes in Vancouver, one can't help thinking that – despite market experts making predictions to the contrary – this is a peak and prices should fall to more reasonable standards. And even if the experts are right and the market will continue its upward climb, I wonder how much higher it could realistically go. Yet BC's population continues to grow through migration from the rest of Canada and the world.
The market will always have some degree of unpredictability but the way things are looking now it may be worth some second thought when deciding to rent or own in Vancouver’s real estate market. Yet the question remains, what is the likely future scenario? And as a tenant, the landlord could always sell the home, meaning a move that was not part of your plan.
Now, however, this logic is less certain. Housing prices are up, making that original down payment substantially larger and increasing monthly mortgage payments as well. As well many investors who purchase homes don't necessarily live in them, increasing the number of rental units available. The rule
of supply and demand dictates that rent prices, therefore, should hold steady, if not decrease. And of course, looking at the current prices of homes in Vancouver, one can't help thinking that – despite market experts making predictions to the contrary – this is a peak and prices should fall to more reasonable standards. And even if the experts are right and the market will continue its upward climb, I wonder how much higher it could realistically go. Yet BC's population continues to grow through migration from the rest of Canada and the world.The market will always have some degree of unpredictability but the way things are looking now it may be worth some second thought when deciding to rent or own in Vancouver’s real estate market. Yet the question remains, what is the likely future scenario? And as a tenant, the landlord could always sell the home, meaning a move that was not part of your plan.
- Sarah Mah
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