Even if his investments were producing more modest returns than they have been, renting would probably still make sense for him. But in our analysis, Vancouver was the only city where estimated rents for a typical house came in at less than that 0.6 per cent threshold and, therefore, the only city where renting made long-term sense for most people. According to a survey of realtors, rents in the other five cities we examined were solidly above the cut-off line, with rents in Calgary topping the list at a lofty 1.14 per cent of the typical home price. In all these cities, home ownership puts you ahead of the game. What's surprising is that home ownership proves to be the superior strategy in these cities despite the generally modest forecasts for residential real estate.
Most experts warn that house prices are more likely to crawl than soar over the next few decades.
That era was created because of the shortage of houses and the baby boomers. Furthermore, Delaney says, when baby boomers begin dying out in 20 years, home prices may actually begin to decrease. In the short term, renting always outpaces buying because land transfer taxes plus legal and closing fees are sunk into the initial purchase and have to be paid off over time. The answer lies in what happens to renters and homeowners over a few decades. Renters can expect to pay rents that will move upward at roughly the rate of inflation so their costs for accommodation never decrease in real terms.