The recent announcement by IRAC to dramatically raise the allowable rental increase on the Island for the coming year affects us – we rent. Thankfully we won’t be left homeless or miss meals like others might, but because our money has limits it might mean no restaurants, which is already a rarity due to the high cost – low reward aspect of eating out in Charlottetown. It will also have an effect on charitable giving. Yes our rent is already that high.
Housing as an investment is weird here in Canada, at least from my inexperienced eyes.
In Taiwan, my experience was that people viewed real estate as an easy investment, an appreciating asset that could either be sold or used later in life. But they wouldn’t rent the house with the same regularity that you see here. Being a landlord was too much of a hassle, and often times we would have to convince landlords that we wouldn’t cause their asset to depreciate.
In Canada, it seems landlords use various means to mortgage a house, then have renters pay the mortgage, while they gain not only the value of an appreciating investment but also a profit from the renters.
The Taiwan model I witnessed resulted in whole districts being built with beautiful buildings, but no one living in them.
The Canadian model seems to create a return to a kind of serf – lord relationship.
In Taiwan it was understood that we could find another place to live with relative ease. So if we had a landlord with unrealistic expectations, or who was uncooperative, we would simply move. Adequate supply makes the relationship more equal.
Canada has no supply, and as such you have no recourse.
One of our many mistakes in moving home was not buying a house before we arrived. It seemed too risky with no steady income, and we wanted more than just a house, we wanted a home. Of course those houses have doubled in value in the past few years, but we didn’t have a crystal ball, and we knew nothing of real estate in Canada.
We are in a better position to buy now, we are more settled, but the question that we keep wondering, is this investment worth it? It was 4 years ago, but now at 2x the cost? It seems everyday the answer inches closer to no, but renting on the Island is not tenable over the long term (for many reasons), so that may mean a move to somewhere else. Somewhere with a functioning medical system perhaps, maybe Europe this time, instead of Asia?