Ralph Kirby Realtor®

250-734-1712

Should you Buy or Rent?

Should you Buy or Rent?

While there are pluses to either position; buying a home has resulted in wealth generating returns over the years. Yes there are cycles in the market and sometimes the advance of prices slows.  But over time, home prices have had huge gains.


Here is a comparison of actual August sales in the Parksville - Qualicum Beach area and what the same house sold for previously.

Many homes show gains of over 10% per year on the original purchase price.

Area

Sold 2018

previous sale

year

% increase

%/Annum

 

(000)

(000)

     

Parksville

$444

$290

2015

53%

18%

Deep Bay

599

247

2007

143%

13%

French Creek

439

356

2016

23%

12%

Parksville

530

130

1991

308%

11%

Eaglecrest

594

358

2012

66%

11%

Qualicum Beach

510

327

2012

56%

9%

Qualicum Beach

550

370

2011

49%

7%

Sandpiper

500

325

2008

54%

5%

Corfield Glades

615

401

2008

53%

5%

Parksville

400

245

2005

63%

5%



That is nice to know that home prices have gone up.

Everyone knows that.


But what does that work out to as a return on the amount invested?


Let’s assume a buyer put 20% down and took a mortgage for the balance.

Using an example from the middle of the chart:

Purchase price          $358,000   in 2012

20% down                    $71,600 

Mortgage                    $286,400

Selling Price               $594,000  in 2018

Net increase               $236,000

The return on the $71,600 invested is  330%!!!


Which is 55% per year over the 6 year period.


That is an AMAZING return.


Ralph Kirby’s comment is “I am not aware of any investment that can beat the return of home ownership. There is no question that Buying is better than renting, financially.”





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