There’s an article today on canada.com about the affordability gap between buying and renting in Canada.
“A report on real estate trends indicates that steadily rising home prices and the recent upward drift in mortgage rates is tilting the economics of housing back in favour of renting over home ownership.”
The report released by the Scotiabank Group links the price difference between buying and renting to the slowing housing market across Canada.
“Among major urban areas, the buy-over-rent premium in 2005 ranged from just $31 per month in Winnipeg to $1,220 in Vancouver. Nevertheless, in most centres, the affordability gap is widening.”
Relative price trends in recent years have consistently favoured renters over homeowners, the report said. Between 2000 and 2005, renters’ shelter costs increased at an average annual rate of 1.3 per cent. Homeowners’ costs, on the other hand, rose an average 2.7 per cent yearly. Rising home prices have been a major inflationary factor, but homeowners have also faced relatively larger increases in insurance premiums and maintenance costs.”