Home prices, particularly in Canada's major cities, continue to increase as the combination of low-interest rates, strong demand, and high land/construction costs continue to put upward pressure on prices. Increasingly, homeownership is becoming more of a challenge, particularly for first-time buyers looking to enter the market.
However, the increase in rental demand is more to do than just about numbers. At the same time, many young people today are choosing to rent rather than own as a lifestyle decision.
We take a look at some of the factors and trends that are emerging in the rent vs. own debate:
- Lifestyle
For many first-time homeowners, buying a home often means living further from the downtown core. Increasingly today, the younger demographic is choosing to live downtown as if provides greater and easier access to transit, place of employment, and entertainment. Being able to walk places not only removes the necessity of owning a car, which can also be a major expense, but means less time spent commuting and sitting in traffic. As well, less time shoveling snow, mowing a lawn, and fixing a home means more time do the things you enjoy.
- Employment Mobility
Gone are the days where your first employer is your last employer and people stayed with the same organization for 25 years plus. Today, corporations are laser-focused on bottom line profits, while employees often go through many career changes. Renters have the flexibility to move based on best employment opportunities, even if that means moving to a different city or part of the country.
- Financial Flexibility
Given the high cost of homeownership, first-time homeowners are often burdened with huge mortgages; these mortgages come with high monthly payment obligations. By renting and without this obligation, young people can choose to work in something want to do rather than have to do. For many, this means starting a business or choosing a profession which they enjoy rather than just collecting a paycheque.
- Family Planning
Times have changed and people are choosing to get married and have children (if at all) later in life. This means that they do not require as much space or require a traditional home in the suburbs with access to good schools and a big backyard.
Ultimately, whether to purchase a home or rent a home is a personal decision that combines all the factors above. Still, it is clear that younger generations are placing a greater emphasis on lifestyle benefits; this is being proven out as more people are choosing to rent and for longer periods of time.
Mainstreet Equity Corp. is a publicly-traded (TSX: MEQ) residential real estate company in Canada. Mainstreet currently owns and operates properties in Surrey, BC; New Westminster, BC; Abbotsford, BC; Calgary, AB; Cochrane, AB; Lethbridge, AB; Edmonton, AB; Fort Saskatchewan, AB; and Saskatoon, SK.
Mainstreet provides affordable, renovated apartment suites to Canadians, and is committed to creating real value without diluting shareholder interests.