A recent report found that Edmonton rent increases surpassed Calgary with a jump of 17.1% percent compared to last year. This increase brings the average rental price in Edmonton up to $1,479.
Average rent for a one-bedroom unit in Edmonton is $1,330 and average rent for a two-bedroom in Edmonton is $1,637.
The increase in rent is coupled with lower vacancy rates. A recent report from the Canadian Mortgage and Housing Corporation found that Edmonton’s vacancy rate for rental apartments fell in 2023 to 2.4 percent from 4.3 percent the previous year.
While Edmonton remains one of the most affordable for rental costs among Canadian cities, the tides may be turning. Faced with unpredictable rent increases in Edmonton, many are reevaluating if they should make the jump into home ownership instead.
We’ve rounded up some of the reasons to consider moving out of the rental market and into owning your own home.
No Control Over Rent Increases
Renters are vulnerable to annual rent hikes, which can significantly impact their monthly budget. In some cases, landlords may increase rent at a rate that outpaces inflation, making it difficult for renters to keep up with rising housing costs. Homeowners, on the other hand, typically have fixed mortgage payments, providing more stability and predictability in their housing expenses.
Monthly Rent Payments vs. Mortgage Payments
At first glance, the monthly rent payment may seem more affordable than a mortgage payment. However, it's crucial to understand that when you rent, you are essentially paying someone else's mortgage. In the long run, owning a home can be more cost-effective, as your mortgage payments contribute to building equity and a long-term investment.
Lack of Return on Investment
One of the significant advantages of homeownership is the potential for appreciation in property value. When you rent, you don't benefit from any increase in the property's value. Homeownership, on the other hand, can provide a substantial return on investment over time, especially in areas with a robust real estate market.
Should You Rent or Buy?
Deciding whether to rent or buy a home is a significant financial decision that depends on various factors, including personal preferences, financial stability, and long-term goals. Here are some tips to help individuals navigate this decision-making process:
Evaluate Financial Stability:
Consider your current financial situation, including job stability, income, and debt. Assessing your ability to handle the financial responsibilities of homeownership is crucial. If you have a steady income and can comfortably afford mortgage payments, homeownership may be a viable option.
Calculate the Costs:
Compare the costs associated with renting and buying. Take into account not only the monthly mortgage payment but also property taxes, homeowners insurance, maintenance, and potential condo association fees. Factor in any upfront costs like a down payment, closing costs, and home inspection fees.
Understand Your Long-Term Goals:
Consider your long-term plans. If you anticipate staying in an area for a significant amount of time, buying a home may be a better investment. If you value flexibility and may need to relocate frequently, renting might be a more suitable option.
Explore the Real Estate Market:
Research the real estate market in your desired location. Assess the trends in property values, and evaluate whether the market is favorable for buyers or renters. Understanding the market conditions can help you make an informed decision.
Edmonton housing market update for 2024
Consider Your Lifestyle:
Your lifestyle and preferences play a significant role in the decision-making process. If you value the ability to personalize and make long-term investments in your living space, homeownership may align with your goals. If you prefer flexibility and minimal responsibilities, renting might be the better choice.
Consult with Financial Professionals:
Seek advice from financial advisors, mortgage brokers, and real estate professionals. They can provide valuable insights into your specific situation and help you understand the financial implications of both renting and buying.
Search Edmonton condos for sale
Think About Your Future Needs:
Consider your future needs, such as family size and lifestyle changes. A growing family may require more space, making homeownership a more practical choice. Conversely, if you anticipate downsizing or a change in living arrangements, renting may provide more flexibility.
Ultimately, the decision to rent or buy depends on your unique circumstances and priorities. Take the time to thoroughly assess your financial situation, goals, and preferences to make an informed choice that aligns with your long-term plans.
With 20 years of experience in Edmonton Real Estate, Wally has helped hundreds of clients navigate the journey of buying or selling a home.
Questions for Wally? Call/text him at 780.238.7384