Why Renting is Better than Buying in Today’s Housing Market
Not sure whether it’s better to rent or buy? Though this debate has mostly leaned towards buying in the past, the surge in housing prices and interest rates today are encouraging more Canadians to rent instead – and for a good reason. According to a recent report from the National Bank of Canada, it’s officially cheaper to rent than it is to own for the first time in years. Renting provides a safer alternative for those who want to avoid those unpredictable interest rates and the risk of being locked into an expensive, long-term commitment. To learn more about why renting is better than buying in today’s housing market, read on.
It’s More Affordable
Affordability is a major concern for many Canadians today as the cost of living continues to rise more rapidly than the average annual income. As a result, the idea of home ownership has become less of a reality for many. On a national scale, a recent report showed that the monthly mortgage payment for an average mid-priced condo was priced at approximately $2,000. Meanwhile, the average monthly rate for renting in Canada lingered around $1,850. That may not seem like much of a difference, but with the surge of costs and debt load that most Canadians are facing, freeing up that extra bit of cash makes a big difference. Plus, you don’t need to pay property taxes when you rent.
No Need To Save For Down Payment
In our current housing market, it takes prospective buyers approximately 49 to 112 months on average to save for a down payment. That’s more than double the time frame it took back in the early 2000s. Thankfully, with a rental, all you need to save for is your first and last. Without having thousands of dollars tied up into a down payment, you can put that extra capital towards other investments. And it’s always better when you can diversify, especially since there’s no guarantee on future returns, even with homeownership.
Do you know where you’ll be living in the next 5 or 10 years? Not many people do, which is another advantage of renting. Tenants get the flexibility to move around as they need to since they’re not tied down to a particular area or address. So if your current rental or neighbourhood isn’t serving you well or there’s a sudden career change, you can easily pack up and move with far less hassle than owning.
Reduce Exposure To Market Fluctuations
There’s a lot of unpredictability in the world today. And with the volatility of interest rates and housing costs, renters can avoid or lessen the impact of market fluctuations. This equates to less stress both emotionally and financially, which is why so many Canadians are in no hurry to buy.
More and more Canadians are starting to resist the urge and pressure to purchase. And with the current state of the housing market today, we don’t blame them! Renting offers an attractive alternative, allowing tenants to keep more of their hard-earned money while avoiding the risk of rushing into a big, long-term commitment.
Looking for a new rental in Ottawa? Sleepwell Property Management has you covered! Search through our extensive listings online or get in touch to speak with one of our rental agents today.