For many of us living in major cities in Canada, today's tough housing market makes buying a home someday seem virtually impossible. House prices have gone through the roof (please excuse the pun) across the country.
Renting is also expensive, though, and the price adds up, especially because the average cost of rent is perpetually increasing from coast to coast. When you have to pay rent each month it means that over time your costs increase. Which brings us to the age-old question - which option is actually cheaper?
A new report has finally given us an answer, and it may surprise you - or, make you sad.
Mortgage Professionals Canada has released a report titled Owning versus Renting a Home in Canada. It looks at the total prices that homeowners pay, compared to what people who rent can expect to pay over an extended period of time.
The report looked at 266 scenarios in a number of cities across Canada. The top three places that were examined were Quebec City, the Greater Toronto Area and Vancouver.
The overall conclusion of the report is that, in most cases, it is cheaper to buy a house in Canada than it is to rent for a long period of time. Which is bad news for anyone who has an apartment and not enought money to get into the housing market.
This is bad news for anyone living in Toronto or Vancouver, where renting is the only option for many - the housing market in both cities is just too expensive for them to ever break into.
According to the report, buying a home may be expensive, “but, the largest element of the ownership cost (the mortgage payment) is fixed for some time. The result is that the cost of renting will increase more rapidly than the cost of homeownership.”
On average, people who buy a house can expect to save $1,295 a month if interest rates on mortgages remain the same as they are currently, over the next five years.
Even if the interest rate rises a little bit, the majority of homeowners will still save money, according to the report.
There are long-term financial benefits to owning a home instead of renting an apartment as well.
The report shows that people who decide to save enough money to buy a house may be more broke to begin with, but end up better off financially than other people close to them in age who are renting.
By buying a house it makes it actually easier to save for retirement once you pay it off, instead of shelling out money each month for an apartment.
The president and CEO of Mortgage Professionals Canada, Paul Taylor, says that the government needs to look at new and better ways to make it easier for Canadians to get their foot into the housing market.
There have been some recent rule changes that help, but not enough has been done yet, Taylor says.
"While recent changes to mortgage qualifying have made the barrier to entry higher, those who can qualify will be much better off in the long term. Given the economic advantages of homeownership," he said.
"Mortgage Professionals Canada would recommend the government consider ways to enable more middle-class Canadians to achieve homeownership. Our collective long-term economic success may be compromised without that support."
So, it seems that if you can't afford to invest in a house right now, you might be better off living with your parents and saving money until you can.