Buying a property is the largest purchase most Canadians will make in their lifetime. For many, it’s also their biggest investment. But strictly financially speaking, are you better off putting down a large down payment and facing higher monthly costs as an owner, or remaining a renter and investing your savings somewhere else? Who ends up with more money in their pocket at the end of the day?
Don’t miss our simulator below. Keep reading to understand how to use it.
To answer this question, we analyzed over two decades of historical data on property prices, rents, inflation and interest rates across 22 Canadian metropolitan areas, alongside long-term stock market returns.
Using this data, we built an interactive simulator. Every time it runs, it calculates the monthly expenses and financial gains for three distinct paths: an owner with a fixed-rate mortgage, one with a variable-rate mortgage and a renter. Whenever the renter’s monthly costs are lower than the homeowner’s, those savings are automatically invested in stocks and bonds to compound over time.
The simulator projects these financial paths over a 25-year period across 1,000 unique scenarios. Some scenarios feature high rents and low interest rates; others simulate average inflation paired with weak stock market returns.
The calculations factor in mortgage payments, insurance, property taxes, maintenance costs, condo fees, rent and eventual selling fees. Every outcome represents a possible future based on historical patterns and the options you select.
Of course, no one can predict the future. This tool provides probabilities, not guarantees, and should not be used for major financial decisions. Below is a simplified version of our simulator. You can find a more comprehensive version with expanded options and a detailed methodology breakdown at the end of this article.
Home prices decline, while stocks surge
Our simulator is not perfect. The past is no guarantee of the future, and many macroeconomic factors are bound to change. Canada’s population is aging, the immigration outlook remains uncertain, an AI bubble could crash stock markets and countless variables continuously reshape the broader economy and housing markets.
Because comprehensive historical data is limited, our tool is based on the last 25 years, meaning it does not account for Canada’s last major housing crash in the early 1990s. Several experts also pointed out that the cost of maintaining a property is often higher than estimated, especially when a roof starts to leak unexpectedly. Furthermore, realistically, few Canadians stay in the exact same home for a quarter-century.
A sandwich board is shown on a street on Quebec’s unofficial moving day in Montreal on July 1. (Graham Hughes/The Canadian Press)
Still, home prices have been declining over the last few years, while interest rates, average property taxes and maintenance costs have increased.
Meanwhile, the stock market has been surging. An investment made in 2005 would be worth roughly seven times more today, compared to just three times more for a property bought at the same time.
Based on this, our calculations reveal a clear trend: If you rent an average studio or one-bedroom apartment and aggressively invest the cash you save by not owning a condo, you have a strong chance of pulling ahead.
But as soon as you step up to a two-bedroom apartment or larger, that math changes quickly. Rent prices swallow up the surplus, making it nearly impossible to save and invest meaningfully.
In fact, in many scenarios, the monthly cost of renting eventually eclipses the cost of owning. A homeowner’s largest monthly expense is their mortgage, typically locked in for a five-year term. Adjusted for inflation, the real value of that payment actually decreases over time.
Rents, on the other hand, almost always rise, often outpacing general inflation. Eventually, the lines cross. The renter begins paying more per month than the owner, wiping out their monthly savings and halting any new investment contributions.
Location, of course, dictates everything. In some regions, owning a condo loses the least amount of money after all cumulative expenses, compared to renting a two bedroom or bigger. Buying and then selling a condo is not a guaranteed profit. Single-family houses or townhouses offer a higher probability of financial return, but they come with a much steeper upfront purchase price.
‘2 housing crises in Canada’
Yet for millions of Canadians, this debate is purely theoretical, and renting is their only option. Half of all couples in the cities we analyzed do not earn enough to qualify for an average condo in the city they live in — a figure that jumps to two-thirds for a house.
The outlook is even starker for the growing demographic of single-income households. Most Canadians are forced to rent, even when doing so is the less financially advantageous path.
“I would argue there are two housing crises in Canada,” said Aled ab Iorwerth, deputy chief economist at the Canada Mortgage and Housing Corporation (CMHC).
“One is the housing crisis for the middle class, affording a condo in places like Toronto, Vancouver and increasingly in Montreal, especially since the pandemic. But there’s an affordability crisis as well for low-income Canadians, who really need help just finding a place to live.”
Affordability is one factor causing younger generations to live with their parents for longer, a May 2026 Statistics Canada study found. They also tend to settle on a career, form a family and buy property later in life, a phenomenon described as “life-stretching.” And when they do finally leave the family nest, they also typically live alone or with roommates more often than previous generations.
This purchasing delay observed among younger Canadian generations can have massive compounding consequences.
“Timing is everything,” said Jean-Philippe Deschamps-Laporte, assistant director of the Centre for Housing and Income Statistics at Statistics Canada, who was involved with the report. When younger generations buy their first property later in their life compared to their parents, this investment has less time to potentially bear fruit.
“Younger generations could face returns that are not what they would have had if they had been born earlier.”
His own research has found that when people graduate during a recession, it carries consequences for the rest of their lives. The same logic applies to the housing and stock markets. If you are lucky, you buy when prices are low and sell when they are high. But more often than not, you do not really get to choose, he notes, as it depends entirely on your current life stage.
So, should you buy or should you rent?
“The calculations done here are very useful for a lot of Canadians, but the most important thing is to do some introspection on how much owning a home will actually improve your life,” said James Macek, assistant professor at the University of Alberta’s School of Business.
Kiana Basiri, assistant professor at the Toronto Metropolitan University, had a similar sentiment.
“We are kind of pushing people toward ownership at the expense of them being tighter financially and less resilient, simply because they really want to own something,” she said.
“We just assume ownership is the best way for people to accumulate wealth over time, but I feel we need more education for people on how they can invest their savings in different ways.”
Furthermore, when people move to the suburbs to find more affordable properties, they sometimes forget to factor in other costs, like maintaining two cars instead of paying for public transit.
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As Jean-Pierre Lessard, an economist and partner at Aviseo Conseil, put it: “We are crazy about property ownership in Canada, but there is no link between a nation’s economic growth and its homeownership rate.”
A key point he made during a talk in a May 2026 conference was that it’s possible for the average household in Quebec City and Montreal to build more wealth by remaining renters instead of becoming owners.
“Originally, public policies to encourage buying were intended to stimulate construction. We’ve lost sight of that,” Lessard said. “We need to return to something more rational.”
In some nations, it is entirely normal to be a lifelong renter. Germany and Switzerland, for example, are famous for having populations where more than half of all residents rent, backed by robust regulations that cap rent increases and protect tenants’ rights.
“Overall, we need to increase the supply of both homeownership and rental units quite significantly,” said ab Iorwerth. The challenge, he said, is to balance supply with measures that encourage homeownership, such as the first home savings account, which tend to push prices up, while simultaneously ensuring there is enough inventory to keep homes affordable.
In June 2025, the CMHC published a report projecting that around 250,000 new housing units would be started each year over the next decade, whereas twice as many are actually needed to restore affordability.
Methodology
The detailed data sets and calculations used can be found here. Our methodology was shared prior to publication with the experts quoted in the article above, and their suggestions helped inform the analysis.
Do you have data that tells an important story you would like to share? Write to nael.shiab@cbc.ca.