It may be good news for property investors if no one else, but one of the countrys most-respected personal finance experts is among those questioning the so-called superiority of homeownership, especially for young Canadians in the current market. David Chilton, author of the Wealthy Barber and a panellist on the Dragons Den, tells the CBC hes worried about the Canadian fixation with homeownership. Im not against real estate, he said. Im against the fact that so many people have it as their primary asset, their only asset in a lot of instances. Thats not good diversification. Its not wise. Its also a reality that an increasing number of experts are questioning given the reduced inventory of houses for sale in key markets such as Toronto.That limited supply is helping drive up prices in consideration of growing demand, which the latest numbers suggest are rising despite dangerously high household debt levels. The typical homebuyers reaction to the phenomenon has routinely been to borrow and save more in order to buy into the increasingly pricey Canadian dream. Chilton is effectively asking young Canadians to rein in on their expectations and err on the side of modesty in order to better spread their investment eggs across several different baskets. My argument has always been a more modest home is a better way to live, he said. Youre not stressed about your financial future.You have enough money flowing through to save. And its easier to keep clean. Still, other finance experts are shooting holes in the whole idea of buying a home at all. Something that could accrue to the benefit of landlords as look forward to a continuing run of the market in their favour. Once youve got the house, theres the car and the TV and the furniture, Richard Florida, head of the Martin Prosperity Institute at the University of Toronto, told the CBC. Thats money thats not being spent on new technology, on adding to your own stock of human capital by upgrading your education, by investing in your future.
Posted on: Mon, 03 Feb 2014 19:12:39 +0000
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