Rent or buy?
BMO is challenging the popular notion that Canadian home prices are overvalued.
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- Canadian homes are not overvalued, especially when compared to rental costs, BMO said Friday citing Vancouver as the exception. The Organization for Economic Co-operation and Development (OECD) recently claimed that Canadian home prices are 64% overvalued. “We can confidently dispel the notion that Canadian home prices are egregiously overvalued versus rents, but they’re not cheap either,” said BMO’s Robert Kavcic in a release. Generally speaking, renting Toronto condo for instance is best suited for those a with a shorter time horizon, Kavcic said. “Young families with a longer time horizon in the detached market should not be deterred from buying, but also shouldn’t expect wealth gains like those of the past decade.”
- Canadian banks starting raising their 5-year fixed-rate mortgages this past week. According to Canadian Business blogger Larry MacDonald, the data suggests the changes won’t sink the housing market.
- In the market for a value health care stock? Cigna may be one of the best deals around, says Bryan Borzykowski.
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