For many owning a home used to be the ultimate goal, but with current sky-high prices that feels out of reach for many in BC. On the other hand if you can find a down payment new numbers show home owners pay significantly less than renters every month. So what do you do? For more on this, we’re joined by Debra Brady from Coast Capital to look at buying vs renting.
This is a busy time of year for rentals and real estate–what do people need to know?
Things are expensive out there and inventory is low across the board. In real estate, buyers and sellers can prepare for a hot spring market. According to Dexter Realty March is poised to be a landmark month for Metro Vancouver housing prices. In February we already saw a significant increase in listings and high home sales. Even though there has been a recent increase in listings, most areas have an extremely low supply. And in many markets across the Lower Mainland they just have a one month’s supply of homes for sale–which by simple economic standards means that the demand will likely far out-weigh the supply.
Owning a home is the ultimate financial [goal] for many people–is that still the case?
Although we are seeing Metro Vancouver begin to set their sights on significant densification an annual report by the Canadian Mortgage and Housing Corporation released in February, found that the vacancy rate in Vancouver had a 1.2% increase in 2021. And for condos that was even lower at 0.8%. The report also found that the average two bedroom in Vancouver was going for $2,500 per month. So with inventory low and prices at record highs, Vancouverites are already experiencing significant housing challenges and should discuss with their financial advisor how they can best prepare accordingly.
Is renting still “throwing your money away”?
While renting may be more expensive in the long term, you don’t have to worry about maintenance fees, strata fees, property taxes, and a host of other expenses that come with homeownership. With fewer funds tied up you may have more funds available to diversify your investments and plan for your future in less traditional ways without having to put all your eggs in one home basket. As a result, you can focus your hard earned money elsewhere.
Is it worth buying a home in 2022?
It really depends on personal financial goals and lifestyle. Some key factors to take into consideration here would be looking at other financial goals you may have and which ones are most appropriate to your lifestyle. You also need to consider the length of time you have to save, how you can build equity, and if you have access to funds. If you have a strong nest egg for a down payment and can get creative through the First Time Home Buyers or other government grants, then it could be that you’re ready for homeownership. If you need a longer period of time to save for a down payment, and you’re forgoing other financial goals (like paying down debt) in the name of saving for that down payment it might be best to talk to a financial advisor to see what the best approach for you could be.
