As the cost of buying homes especially in the GTA have risen faster than incomes, it has now become cheaper to rent rather than for the first time in years, National Bank of Canada said in a report.
The report found the mortgage payment on a median two-bedroom condo had risen to around $2,000 in the fourth quarter of 2018, or about $150 more per month than the rent on a two-bedroom rental condo.
Renting is a better option in Toronto, Montreal and Vancouver.
While both house prices and rental rates accelerated from about 2015 onwards, house prices rose much faster, and mortgage payments left rental rates in the dust.
With house prices now growing slowly one may be able to save up a larger down payment for a nicer home down the road.
With house prices now growing slowly if at all, you may be able to save up a larger down payment for a nicer home down the road. But if the cost of renting in a desirable area is high, it might then make sense to buy a less fancy house instead.
Given that rents can potentially eat up a significant portion of one’s income, a young person may be better off sharing the rent with three or four friends or move back in with his or her parents. The reality is it doesn’t make financial sense for someone earning an average income to be renting solo. That is a luxury few individuals can afford. -CINEWS