Rent vs. Buy - the ultimate debate

In cities such as Victoria, BC, buying a place to live requires a large amount of cash (via the lottery, generous parents or equity in your previous home) and the stomach for a very large mortgage. Some say that housing prices are completely overvalued and some cities are severely unaffordable to live in (like Vancouver) and it sure seems that way in this town. Speaking with a mortgage broker is the best way to determine whether you can even qualify to be a homeowner but if they show you how you can squeak into the market, you may want a second opinion. Calculators such as Renting vs. Buying a Home are quite popular with owners and renters to see if you should be in the others' shoes. It shows your total costs between buying (mortgage + expenses) and renting. It assumes you invest the difference between your rent and mortgage...if you don't have the money to invest, then you probably don't have the money to buy. *Make sure you don't check the Federal tax boxes - in Canada there is no capital gains tax on the sale of your principle residence and the mortgage interest is not deductible. The government provides handy calculators as well.

"Shall I rent or shall I buy?" is a hot question these days as housing prices continue to climb (I've been hearing talk of a bubble burst for a while...I have yet to see it, but when I do, my cash will be ready!) and rent seems to be fairly stable (and affordable).

Ben Rabidoux, financial adviser, real estate expert and author of the website The Economic Analyst ( says it best: "The reality is that the majority of new home 'owners' are still renters; they've just gone from renting space to renting money."

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