There’s been some chatter around Calgary about potential home buyers deciding to wait on property ownership (or forgo it altogether) deciding to rent instead. Newspaper articles report on Calgary’s “cult of home ownership” and that more than 80% of those surveyed wouldn’t purchase a home now.

I admit there are those better suited to renting but the majority of Calgarians who are building careers and growing their families are kidding themselves if they believe they’re better off renting than buying.

Alberta is the most affordable housing market in Canada (RBC Economics Research:  http://www.rbc.com/newsroom/pdf/HA-1125-2011.pdf). Strong employment and high income levels in this province combined with incredibly low interest rates means that owning a home in this province is one of the best financial moves you can make.

On a $350,000 house that you own for just 3 years, you will make approx $15,000 (with an average increase of 3%/yr after commissions). To save that you would have to bank about $420/mo in addition to paying your rent.

Add this $15,000 to the $17,500 that was your initial down payment (based on 5% down on original purchase of $350,000) and you now have $32,500 equity to pull out of your house. That would take $900/mo savings on top of paying rent.

These numbers are based on staying in that house for 3 years, the average is 6 years.

The best way to ‘save’ for a down payment is by owning the home you live in and building equity in it.

This will mean that your first home isn’t likely going to be everything you want but let’s face it your first job wasn’t likely what you wanted to do for the rest of your life; you build and move up. Home ownership takes the same path..

If you have questions or comments about anything in this blog be sure to contact me.