Those of you predicting 10% interest rates: Never say never, but I'd be highly surprised if that happens in the next 5 years. In other words, if you're
counting on 10% interest rates before you buy, you'll be waiting a very, very long time. And it's not as if you'll save any money anyway, unless you buy the place in cash.
OTOH, I wouldn't be surprised to see say a 7% 5-year fixed rate in 5 years... which is the time current 5-year terms reset. Those of you who are buying now should really consider that. If you're leveraging yourself to the max with a 35-year amortization now, then you may be in for a big shock when you're up for renewal in 2014. I often suggest to people that they should target their purchases such that they can afford a 25-year amortization or better. If so, then they can consider a 35-year amortization with early repayments, to give themselves more flexibility.
the best times to buy is in the winter. RE is usually slow because people don't like to move in the cold I guess?
True to an extent, but not so much at the low end of the price scale, and esp. not for condos in the core.
A real estate agent mentioned to me a while back that in the Toronto market, if you're buying a bigger detached home, winter is often the best time to buy. But then again, you may be limiting yourself because a lot of the new listings come to market in the spring, and the good ones are sold by the summer. OTOH, if you're looking at a condo under $400000, don't expect any price discounts just because it's winter. I've been superficially following the market, and it seems his statement is more or less accurate. Lower prices for big detached homes but poorer selection in the winter, and no real price discount for 2-bedroom condos. Things were cheaper this last winter, not because it was winter, but because we had an economic crisis.
I don't know about $300000 west Scarborough houses though.
what is wrong with renting? Do you feel like you are somehow postponing your life? You can rent houses and condos for less than the costs of owning them (mortgage plus expenses), plus you don't have an illiquid asset or have to worry about the upkeep. Take it from this homeowner -- the grass is not greener on the ownership side.
Take this from this homeowner. The grass is much greener on the ownership side.
Seriously though, there are plusses and minuses to both sides. The biggest problems for me was that nice detached homes in nice neighbourhoods are hard to find to rent, and even if you do find one you can't do anything to the place. With an owned home you can make any modifications you want (within reason). Furthermore, there's always the worry about getting kicked out at the end of the lease. The plus about getting a rented home is that maintenance costs get borne by the owner - and maintenance costs sometimes can be very, very expensive, esp. for older homes. But then again, in rentals often times things go unfixed for months.
As for the asset being illiquid, that is true. I wouldn't buy if I didn't expect to stay in one place for 5 years or more.
