To rent or buy: the pros and cons of owning your own home

The debate on renting versus owning a home heated up again this week after a warning from the Canada Mortgage and Housing Corporation on overvalued housing markets. It highlighted the housing markets in Toronto, Winnipeg, Saskatoon and Regina as particularly overvalued.

Moshe Milevsky, an associate professor at the Schulich School of Business at York University, broke down the pros and cons of buying and renting.

Pros for buying

"You own the shelter, the roof over your head, the fact that you decide, you control your own destiny," Mlievsky said.

The other factor is that owners get to take advantage of the appreciation of the house, he said.

"There is simply something non-quantifiable about home ownership that's impossible to achieve when you're renting."

Cons of buying

Milevsky said the downside of home ownership, especially when you read the report from the CMHC, "is that in a few years from now you might find yourself in a situation in where the house is worth less than what you paid for it."

He said the alarming factor about that is that home owners could see their equity disappear. Meanwhile, he said there are several bonuses to renting.

"I think that the biggest advantage to renting is the flexibility and the ability to change paths in your career, in your life without having to worry about selling a house," he said.

He added that fixing problems with the home is usually a phone call away to the landlord.

Milevsky said if he was offering advice to young people, he'd have to be convinced that home ownership makes sense for them before recommending that path.

When asked about empty nesters looking to downsize, he said now may be a good time to act: "You might want to accelerate your plans and take advantage of higher prices now."