Is it better to rent or buy a home in Calgary?
That's a tough question with no easy answer. But there sure is plenty to talk about.
Our recent story on young people who can afford to purchase property but are opting to rent has spurred a lot of discussion.
It generated hundreds upon hundreds of direct comments and even further talk on various social media platforms. And it came from not just Calgary, but across Canada and around the world. So we went ahead and curated some of the more thoughtful comments and present them here for your consideration.
After all, Calgary: The Road Ahead is meant to be a marketplace of ideas.
So let's explore some different points of view, broken down into a few general themes.
Three cheers for renting
A lot of readers said they were pleasantly surprised to see renting portrayed in a positive light, in contrast to what they often hear from friends, family and society at large.
"My wife and I are successful young professionals in Vancouver," wrote Steve Dee in the comments below the original story.
"We are constantly having to defend our position to rent — why? We watch our friends spending their parents' life savings on homes they can barely afford. I understand the potential of home ownership because our families have been telling us for years to buy. But it's time we stop following a cult mentality and research our investments."
James Norton expressed a similar sentiment.
"I'm a CA, my fiance is a doctor, we're both under 30 and we rent our house," he wrote. "Do we think we are throwing our money down the drain? Absolutely not. The mentality that home ownership is some sort of golden ticket to financial prosperity is just foolish."
And just a quick note here to acknowledge that we realize people don't always use their real names in online comments. Throughout this article we'll be quoting people based on their online handles.
Like "SaskatoonDream" on Reddit, for example.
"At my age, I do not have the time, money, or skills to handle any major issues with a property I own. I don't think the article is saying a house is a poor investment, just pointing out that it is nowhere as easy as it used to be."
Numerous readers also praised the young people in the story — members of the oft-maligned millennial generation — for resisting the pressure to purchase and making independent decisions based on their own calculations and life situations.
"Today's millennials are simply too logical and pragmatic to fall into the trap of home ownership in overheated markets," tweeted Markus Muhs, an investment advisor based in Edmonton.
Buying is the way to go
Other readers, however, weren't convinced that the orthodoxy of ownership is mistaken.
"If you can afford it, it really is a buyer's market right now," Ryan Jones wrote on Facebook.
"Yes, interest rates are going up but they aren't horrible, especially compared to what they used to be.... Under five per cent is still good and the only reason you saw it go down to 2.5 per cent was to prevent the market from crashing even further. You probably won't see those rates again anytime soon."
And he wasn't alone in that view. The relatively low interest-rate environment was frequently mentioned.
"Anyone who hasn't taken advantage of low rates in the last decade for a home and to leverage investments has lost out on trainloads of cash they'll never be able to make up," Albert Franken wrote in the story comments.
"Opportunities so obvious come around like once per generation."
Chuck Bremner thought the story was too full of "what ifs" when it came to the potential downsides of investing in real estate.
"I suggest that the odds would favour buying in Calgary," he commented. "Over time, Calgary will grow faster than the Canadian average, often much faster."
The 'forced savings' effect
Plenty of readers also pointed out that the people profiled in the story aren't your typical renters. While they may diligently invest the money they save by renting, it's not realistic to expect everyone will do the same.
"The thing about renting and then investing the down payment and savings is that you need to stay disciplined over a long period of time for that to work out in your favour," Jake De Rock wrote in the comments.
"Many people do not have the ability to execute that plan (either because they can't maintain their investment mix properly, or they can't keep the savings rate), and for them buying a home probably turns out to be better in the long run."
Charles Jones agreed.
"It's actually trivial to prove it's better to rent and invest the difference between rental and ownership costs if you're only looking at it from a disciplined financial standpoint," he commented.
"A mortgage is a forced savings plan that works almost always. That's why ownership works better for the average person."
Others who have experience in the real estate market, however, said they regret their decision to buy and warned others to tread carefully.
"I've been through a few housing crashes (in 80s Calgary my family lost an absolute ton of money)," wrote calgarydude1115 on Reddit.
"I bought a vacation property in the states in 2007 which I got pooched on, and my wife's family lost a generation of wealth when Spain crashed. I don't think Calgary will crash, but a 15 per cent correction over the next five years would not be that surprising to me."
That was a common theme on the Calgary subreddit.
"It's definitely a renters' market right now, and as a homebuyer I regret my decision of buying," wrote balkan89. "Literally all my 'wealth' the last few years has come from the stock market (it's been a long bull run) and none from real estate."
Another user, asad16, chimed in to say: "I've lost a ton of value in my place in my condo in East Village and I've made a ton of money in the stock market. Wish i used that money in the market. I regret buying my condo too, quite often, but I hope one day I'll be able to break even."
Looking at the bigger picture
One other theme that emerged was a critique of the prevailing view of your home as an investment rather than a place to live your life.
"Here's the problem," wrote Peter Jackel in the story comments.
"Once people bought houses to have a place to live. Now they buy them to make money."
Grant Reynoso added: "This discussion does a good job of exposing the inherent problem in our system of property ownership — the conflict between home ownership as an investment and home ownership for housing."
Others noted that renting is the norm in other parts of the world that seem to be doing quite well.
"People who think home ownership is the be all and end all need to talk to the majority of the European community who don't chase after 'ownership' of a home," Ross Heller commented.
"They are educated people and they spend their lives, their time and their money instead on travelling, culture, a very nice car, adventure and enjoying their friends, etc. Home ownership is largely a North American thing. It isn't a life necessity nor is the root/key to happiness and fullfillment."
David Zhou took the comments to an even deeper philosophical level.
"You own or you rent, no one actually owns anything in this Earth," he wrote.
"We are all users on this planet just for a temporal time period before our death. We use things, not own things. You have to understand this. Ownership is an illusion."
Do you have thoughts on these thoughts? Feel free to add your point of view in the comment section below. Or get in touch if you're interested in submitting a more substantive article for Calgary: The Road Ahead — on this topic or something completely different. Our contact info is below.
Calgary: The Road Ahead is CBC Calgary's special focus on our city as we build the city we want — the city we need. It's the place for possibilities. A marketplace of ideas. So. Have an idea? Email us at: email@example.com
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