With the press telling the country that the housing market seems to have stalled in July, some people are asking if homeownership is still a good investment option. The US real estate market has painfully demonstrated that no one can guarantee that the house prices will continue to climb year after year.
Is the Canadian housing market any different?
We have not experienced the drop in equity that our neighbours have endured. Any guarantees that we won’t? The pundits agree that it is not likely to happen here. It seems, though, that the age of double digit price increase has gone.
Should we give up on homeownership as a way to build wealth? Value appreciation is only one benefit to homeownership. In the past, the dream of owning your own home was also considered a tidy tax-free way of building a nest egg. Not by dramatic price increases, but by paying down the principal of your mortgage to own it free and clear. It is a way to save money.
Consider that, according to a study by harris Decima for Scotiabank, almost one third of Canadians don’t have a savings plan even though, they want one–94 percent said that they would feel better if they had a financial safety net. Homeownership can offer you that.
Consider it “forced savings.” Whether house prices rise substantially or not, at the end of the day, buying a home, and paying down the mortgage will give you a tidy nest of financial security–and a place to hang your hat.
How about it?