An attempt to take the emotion out of the decision and look at what you need to believe to buy a house in the current Canadian Real Estate market.
Goes through taking into account the intangible benefits to owning vs. renting, how much people need to make to “safely” carry mortgages of various sizes, whether the divergence between rent and buy over the last 10 years could be based on fundamentals (vs. solely based on debt), some discussion on what has caused the mortgage boom, and some case studies on rent vs. buy for Toronto properties.
This was made as a PPT to be delivered to some friends, but I figured I’d throw it up here as well. I’ll try to come back and write a post on this as well.
H/t to Ben Rabidoux for the Real House Price chart (and for fighting the housing bear fight) and to The Holy Potato blog for spurring me to think about this topic deeper, digging up the census numbers as well as creating the Rent vs. Buy model that some of the conclusions are based on.