The Globe and Mail has an interesting piece detailing the end of easy money. The main point: consumers are retrenching, renting, and paying off debt. This is a good strategy.
“Easy money is over,” says Dan, who predicts that Canada’s real estate market will follow the U.S. market’s dive with about a 30-month lag.
He’s thankful that the sellers didn’t even counter his lowball offer of $425,000 for a house listed at $495,000 back in September. According to Dan, the house sold in December for $412,000. He’s planning to rent for the foreseeable future.
Debt is suddenly an obsession in North America. According to the pundits, consumers in the United States and Canada are now recoiling from the weighty mortgages, credit card balances and home equity lines of credit they used to shoulder so effortlessly.
If that keeps up, some predict, the housing market will not rise significantly for years.
Renting is not necessarily a bad strategy: if the cost of renting a home is much cheaper, then it is better to rent than buy. Given that housing prices are going down and won’t be going up anytime soon, better to pay off debt than rush to buy a house.