The assumptions made by the author are ridiculous, namely:
- In the 10-year comparison, rents paid are not factored in at all.
- In the forward-looking comparison, condo prices are assumed to be flat, mortgage rates go up (why? can't they be locked in now?), while equity prices go up 6-8% per year
- Taxes are not factored in at all - capital gains on a primary residence are tax-free, while investment gains will be taxable (eventually, even if buy-and-hold)
- Mortgages allow an effective leveraged investment on home equity, so your gains (and losses!) on home values are magnified
It's a worthwhile debate, and there are merits on both sides, but such blatant bias has to be pointed out.
Also: in the US, unlike Canada, there are tax benefits for a mortgage...
It's a worthwhile debate, and there are merits on both sides, but such blatant bias has to be pointed out.
Also: in the US, unlike Canada, there are tax benefits for a mortgage...