The Affordability of Home Ownership: Buying -vs- Renting

This table compares the cost of buying a condo to renting a similar home in Victoria, BC.

Renting a 2 bedroom apartment $1,300 - $1,500/month

Buying a 2 bedroom condo*
$250,000 Purchase price

$ 12,500 5% down payment (required)

$ 5,000 Est. closing costs

$ 1,072 Mortgage principal & interest

$ 210 Est. monthly strata fee

$ 154 Est. monthly property taxes

$ 1,436 Est. Total Monthly payment

*Requires a combined gross income of $52,000/year and a good credit history

Renting a 3 or 4 bedroom apartment/house $1,600 - $2,000/month


Buying a 3 or 4 bedroom condo/townhouse**

$400,000 Purchase price

$ 20,000 5% down payment (required)

$ 8,000 Est. closing costs

$ 1,716 Mortgage principal & interest

$ 250 Est. monthly strata fee

$ 210 Est. monthly property taxes

$ 2,176 Est. Total Monthly payment

**Requires a combined gross income of $80,000/year and a good credit history.

From Ian Baker, Beyer Mortgage Services

Ken Stratford and Norm Gidney

Last Friday I attended a talk given by Ken Stratford of the Greater Victoria Economic Development Commission. Please check out his blog -
http://thecapitaloptimist.blogspot.com. It has alot of good local business news and good news on the economy. Also speaking was Norm Gidney, editor of "Douglas Magazine".
A few highlights:
EDS Advanced Solutions - hiring 120 new employees
Victoria February hotel stays were almost the same as Feb 2008.
Victoria has almost full employment.
A book Ken recommended is "Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business" by Jeff Howe.

Have you heard the news?
The local real estate "crash" seems to be over. The power of the media over the last few months certainly affected the market. But Victoria seems to hold it's own, even in times of global recession and financial crisis. That's one of the beauties of investing in property here. Residential properties are currently selling at a higher than expected volume. Just looking through the listings in our office - there aren't really that many compared to a month or two ago. Yes, they've sold. "Lower interest rates and resulting increased affordability have energized the entry-level housing market", says Victoria Real Estate Board President Chris Markham. It's a great time to buy or sell. There are lots of buyers looking, which is good for sellers, and there are some great deals to be found, which is great for buyers. With the first sunshine we've had for a while, that puts everyone in a positive, optimistic frame of mind also!