Housing prices have gone through the roof and this is a trend we’re seeing with no one knowing when prices will, if they ever do, drop. I remember talking to an older couple I went to the same church with when I was young, they’d tell me when they bought their house, it barely cost $20,000. A price that is unfathomable today.
In the last few years, there has been an even bigger jump in prices than before and one of the top concerns Vancouverites have is not being able to afford a home. This leads to the question, is owning a home a necessity? Do the benefits of not owning a home outweigh the negatives?
For many people, owning a house is seen as a key part of the American or Canadian dream. It represents stability, security, and a sense of accomplishment. However, for others, owning a house may not be a priority, or it may not be financially feasible. In this article, we’ll explore some of the reasons why someone might choose not to own a house, and the benefits of this decision.
Even with a tripling of units built in Vancouver between 1960 and now, the price per sq ft of market housing quadrupled in real terms. Salaries stayed stubornly flat in real terms. Adding density was good for many reasons. I am a fan. But low prices did not result. pic.twitter.com/ahLcdmLoKp
— Patrick Condon (@pmcondon2) May 1, 2023
Financial Considerations
One of the primary reasons that someone might choose not to own a house is financial. Homeownership comes with many costs beyond the purchase price, including property taxes, maintenance, repairs, and insurance. Depending on the location and size of the home, these costs can add up quickly and make homeownership unaffordable for many people. Additionally, in some markets, the cost of housing has risen so rapidly that it may be difficult or impossible for some individuals to save up for a down payment.
This is especially true for a city like Vancouver where even an average apartment is easily going for half a million dollars. Wages are not rising nearly as rapidly as housing prices. This means some people may never be able to afford a home.
Lifestyle Flexibility
Another reason that someone might choose not to own a house is lifestyle flexibility. Renting allows for more flexibility to move and change living situations as needed, without the burden of selling a property. Renting also offers a wider variety of housing options, including different types of housing such as apartments or condos, that may be more affordable or better suited to an individual’s lifestyle.
It’s important to evaluate the circumstances and make sure owning a home is compatible with the lifestyle you’d like to live before jumping into a purchase, even if you do have the finances for it.
No Maintenance or Repair Responsibilities
Homeownership comes with the responsibility of maintenance and repairs. For some individuals, this can be a significant burden or cause undue stress. When renting, these responsibilities are typically the responsibility of the landlord, which can be a relief for those who do not want the added stress of maintaining a property.
The apartment I’m living in is around two decades old and already, the skylights on the top floor are leaking and the underground parkade also leaks whenever it rains. Rounds of repairs have been done but still cannot fix the issues.
The repairs are contracted by strata but if you own a standalone house and the sole responsibility is on you to find people to fix these issues, it can definitely be a big stressor. Plus, there are monthly strata fees owners of these apartments have to pay in order for repair work like these to be carried out.
The Opportunity Cost of Owning
Owning a house also comes with an opportunity cost. Money spent on a mortgage payment, property taxes, and maintenance cannot be spent on other things, such as travel, experiences, or investments. For some individuals, the opportunity cost of owning a house is too great, and they would prefer to spend their money in other ways.
Again, knowing your priorities and what you value more is important, because the money put into the above things will add up to a significant chunk over the years and if you’d rather spend money on travelling or something else, owning a home may not be right for you.
https://twitter.com/hewantswealth/status/1656208962146926594
Investment Returns
While owning a house can be a good investment, it is not guaranteed. The value of real estate can fluctuate, and there are no guarantees that a property will appreciate in value. Additionally, owning a house requires a significant investment of time, money, and energy, and some individuals may not be interested in making that commitment.
Access to Other Investment Options
Choosing not to own a house can also open up other investment options. Money that might have been spent on a down payment or mortgage payment can be invested in stocks, bonds, or other assets that may offer a higher return on investment.
Renting Can Be Cheaper
In some markets, renting can actually be cheaper than owning a house. This can be especially true in areas where property values are high or where the cost of living is high. In these cases, renting can be a more affordable option than owning a house.
The other thing worth mentioning is that owning a home can tie you down to a location in many ways, since it’s not as easy to move around. If the home you own is in your ideal location, great, but for many in Vancouver with current property prices, that won’t be the case. Many people probably have to choose properties that are farther away than they’d like in order to afford them.
This means added travel expenses and time on a frequent basis. Currently I live in Coquitlam but on most days when I go out, I’m going to Vancouver, Richmond, Burnaby etc. There isn’t really much to do in Coquitlam and this means driving for up to an hour each way for every trip. When you make such trips on a frequent basis, not only is it costly, it can also become taxing and tiring rather quickly.
The Emotional Toll of Owning
Finally, owning a house can be emotionally taxing. Homeownership comes with a significant amount of responsibility, and it can be stressful to be solely responsible for the upkeep and maintenance of a property. Owning a house can also tie an individual to a particular location, which may not be desirable for some people.
While owning a house is often seen as a dream or an ideal pushed by a large part of society, it is not the right choice for everyone. With housing prices being the way they are right now, not only is it becoming less obtainable, a lot of people are also choosing to not make owning a home as their goal or endpoint.
There are many reasons why someone might choose not to own a home, including financial considerations, lifestyle flexibility, and the emotional toll of homeownership. Ultimately, the decision to own a house should be based on an individual’s values, priorities, and financial situation. While owning a house can be a good investment, it is not the only way to build wealth or achieve financial security. It’s time we break out of the mentality that owning a home is a must, or that it’s a requirement for stability or overall happiness, the world is changing quickly, so our mentalities need to as well.