Buying or renting? A Royal Lepage study!

Not sure whether to buy or rent? Consult the Royal Lepage study to help you make your decision, and contact us. 

Buy, if you have the necessary downpayment! This is what the latest Royal Lepage study, carried out with economist Will Dunning, reveals. Indeed, backed up by figures, it shows that homeowners are the financial winners in 90% of the scenarios studied by the economist*.

The future buyer’s dilemma

Many Canadians are faced with the question of whether to buy for the first time, or to continue renting for a while longer… When you’re just starting out in life, becoming a homeowner can be scary, with its many duties and responsibilities and higher monthly expenses… but it also offers greater stability and represents a long-term investment. Renting may be more flexible, but the money spent on it will never be recovered!

Making numbers talk

Royal Lepage has set out to verify this popular belief with figures.

To carry out this study, the real estate professional teamed up with Will Dunning, a renowned independent economist who has been specializing in housing market research for 40 years. It compared ownership and rental costs in 4 different ways:

 – A comparison between the cost of owning and the cost of renting the same home, based on the most recent data.

 – In the fairly recent past, what were the costs listed in the first month of buying a home compared to renting a similar one; and how have they evolved over time.

– Looking ahead to the next decade, how would the current costs of home ownership compare with the costs of renting the same home?

– Over the same decade, at the end of which the home would be sold, what return could investing in a property generate?

It was based on 278 case studies, seven different housing types, in 6 Canadian provinces. *The analysis assumes that the buyer makes a down payment of 20% and that the initial mortgage is 80% of the value of the home.

Results :

• In 91% of the cases analyzed, the monthly costs associated with owning a home are lower than the rental costs, based on the net cost of ownership. This is the total cost of ownership minus the savings generated by principal repayments. This factor is known as the “homeownership advantage”.
• The net costs of owning a property were $769 lower on average than those of renting the same unit.
• Even with a 10% decline in property values over 10 years, half of owners would see a positive return on their investment, while the other half would break even or experience a small loss.

Would you like to find out more about the survey results?

Click here to download the full results

If you’re planning to buy or sell, contact us!