Quote:
Originally Posted by dinosaur
There are at least 1/2 a dozen recent posts in the Home & Renovations forum. All asking the same thing, all with the same issues, all with the same delusions of how wonderful and how great of an investment home ownership is. Someone just said it here a few posts ago....why rent for 1300$ when you can OWN for $1650!? "The add in the paper says my mortgage payment will be cheaper than my rent!! WHY RENT WHEN YOU CAN OWN!?"
Because you can't own for $1650....at least not without a substantial down payment. And, imo, why would you sink all your (or, lets face it, your parent's) life savings into an "investment" that have no return currently? Also, while your mortgage may be $1650, there is no accounting for strata or property tax. Bet the $1300/month rent isn't sounding too bad after all.
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This will be the calculation that starts a correction in real estate. Rents are plateaued at a max of 2.2% increase on existing leases. People will start moving out of condos and realizing that they are needing to bring a check to closing, and sooner or later, even the dipshits at Global will have to start talking about it.
This will occur independent of anything to do with the economy, or jobs or weather or mountains or even interest rates. It is purely a supply side issue with over-supplying the marketplace with condos. Their prices are not increasing.
People will start asking, "why did I buy further away from work when I could rent cheaper closer? The promised upside of equity never materialized, and I live in a blah tower next to a random millenium line skytrain station"