Personal Finance

Should I buy a house?

  • Last Updated:
  • Oct 28th, 2005 4:09 pm
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Deal Expert
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Oct 9, 2003
18046 posts
980 upvotes
I bought as i was able to get a nicer condo then the apartment i was rent for cheaper than rent. I got an interest rate of 3.75 on my loan (i put down 15%). I think it depends more on things like if you think you will live there for a while and what not. BTW capital gains taxes are only avoided if you live in the residence for atleast 6 months.
Deal Expert
User avatar
Jun 14, 2003
23140 posts
202 upvotes
sparkplug wrote:In the weekend paper, 77% of Canadians surveyed called real estate a good investment. Only 42% said the stock market was a good investment. Mind you, the survey took place around the time when house prices continue to surge and the TSX took a nosedive that week on falling energy prices. Energy stocks have made the TSX index volatile.
Hmmm! Why does the survey matter?
Banned
User avatar
Dec 24, 2004
10708 posts
152 upvotes
grant wrote:Even better, $1000 flat-rate with Olympia-Pacific:

http://www.realestate-bc.ca/list/

Both Olympia-Pacific & Erealty are nice to deal with.... but you save $500+ with Olympia-Pacific!!
You're right, i looked at their site, it looks good. And just like erealty, they let you set the buyers agent comission. So if you wanted to be really generous and attract lots of attention you could give them more than their normal 3% and still save thousands compared to a traditional broker.

For those of you that RENT OUT BC Condos, here's some bad news

"CONDO INVESTORS FACE NEW RESTRICTIONS

Last updated Oct 19 2005 11:45 AM PDT
CBC News

B.C. condo owners who have rented out their units for years may be in for a
shock as new strata legislation takes effect in January.
It will give strata councils more power to enforce bans on rentals, which
could mean new restrictions for owners"
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Jr. Member
Dec 26, 2003
144 posts
7 upvotes
Nemodigital wrote:Check the link bellow for the best article on the Housing Bubble.

http://www.fool.com/news/commentary/200 ... 102606.htm

I think right now is not the best time to buy and if I were you I would hold off (read the article as I think you will agree as well).

Cheersch!
Very interesting article, thanks for sharing the link Nemo D.

Personally I think I'll take your advice and hold off. House prices in Vancouver have become incredibly expensive! I looked at a few open houses last weekend. Old-timer/Fix'er uppers, on average can cost around $450K. If I recall 7-9 years ago, you can almost get a mansion at that price. But then again, the interest rates back then were fairly high.
Deal Addict
Apr 25, 2004
1221 posts
185 upvotes
Nemodigital wrote:Check the link bellow for the best article on the Housing Bubble.

http://www.fool.com/news/commentary/200 ... 102606.htm

I think right now is not the best time to buy and if I were you I would hold off (read the article as I think you will agree as well).

Cheersch!
Speaking about Toronto, I do not think this article applies. In the US, prices have gone up more ridiculously than Canada. I read another article that many properties are actually held by speculators/investors, not the actual residents. I personally know someone who owns 3-4 homes in the San Jose area!

Most properties (excl condos) are bought by the actual residents in Canada. I recently looked at a downtown semi-detached, very nicely renovated, which sold for ~$600k. It's an insane amount of money, but applying the 200 x rent rule, it's not too far off...

But the 200x rule seems to be a good one. I'm still looking and will be more careful.
Newbie
Oct 27, 2005
3 posts
It doesnt make any sense to hold off buying a house. If you wait 2 years to hopefully cash in on lower house prices(By the way if you want to live in a big city, don't count on them dropping that much due to demand and immigration) you'll be paying 2 more years of rent. That's money out the window, unless you live with your parents. Owning a house that you can afford doesn't cost much more than renting. Be careful not to get a too large of a mortage. Banks say that if 25-30% of your income goes to a mortage your OK, wrong! Try 20% max to your mortgage and you'll be able to live comfortably.

One more thing, the 1st house you buy isn't going to last you more than a couple of years anyways, so buy for investment purposes only. Eventually when you build up enough equity, you can get the house you want.

I h.ope it doesn't sound like I'm preaching, but I see fellow workers of mine make that mistake and wish they had bought a few years ago. Now they can't afford anything more than a shack in a bad neighbourhood.
Deal Addict
User avatar
Aug 19, 2004
1022 posts
76 upvotes
thescore wrote:It doesnt make any sense to hold off buying a house. If you wait 2 years to hopefully cash in on lower house prices(By the way if you want to live in a big city, don't count on them dropping that much due to demand and immigration) you'll be paying 2 more years of rent. That's money out the window, unless you live with your parents. Owning a house that you can afford doesn't cost much more than renting. Be careful not to get a too large of a mortage. Banks say that if 25-30% of your income goes to a mortage your OK, wrong! Try 20% max to your mortgage and you'll be able to live comfortably.

One more thing, the 1st house you buy isn't going to last you more than a couple of years anyways, so buy for investment purposes only. Eventually when you build up enough equity, you can get the house you want.

I h.ope it doesn't sound like I'm preaching, but I see fellow workers of mine make that mistake and wish they had bought a few years ago. Now they can't afford anything more than a shack in a bad neighbourhood.
But again the question is whether its good to buy right now... I would say no but a few years ago my response would have been different. Keep in mind the immigrants only really offset our low birth rate so its not like Canada is growing by leaps and bounds.

I would say it all depends on your situation, if you are young and aren't certain where you want to live then rent something but to buy a house as an 'investment' at this point is absurd.
Deal Fanatic
User avatar
Aug 19, 2001
5171 posts
116 upvotes
Vancouver
Super strokey wrote: BTW capital gains taxes are only avoided if you live in the residence for atleast 6 months.
Wrong.... in both Canada and the USA for that matter...

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