For the person who doesn't own a home the person would need to pay a few thousand in rent to live in a comparable home as the home owner. For the home owner none of his paycheck goes to rent so he's able to save and invest. After several years the non home owner still has no home whereas the home owner still has that asset. The house also appreciates in value so one can one day sell the home and live in a smaller home and have liquid assets. The homeless is still paying rent. What's being distorted? Those are the facts.
there a bit more to it then what you suggest. while owning a million dollar home technically means you are a paper millionaire through accumulated equity through time, its not actually a realized gain. as we see now how much those million dollar homes have lost value. the typical 1000000 home in the gta. about 1.7 goes towards taxes to the city $17000. repairs and maintenance say 2-5k on a low year. this does not include significant capital cost such as a new roof. utilities probably 3-4k. not to mention the actually cost(interest) of ownership over 25 years is approximately double the price of the original purchase price. as well when your house goes up in price so do your taxes.
a house is not a true asset, unless its purpose is to make money(rental property).
you are correct that a home owner has a physical home. there is an argument to be made for renting in some circumstances and it make financially more sense to do so in certain situations. I dont live in the gta so I dont know about the rental market; however, after all the expenses incurred, taxes, borrowing costs, repairs and maintenance, related fees and etc there is a mathematical argument of renting over buying(depending on your circumstances). as a renter you dont pay closing costs, repair and maintenance, taxes(directly most the time its part of the rent), sometimes utilities, any interest towards a mortgage.
using your investing strategy of selling a downsizing and buying assets does work; however, by investing over the long term any extra cash as a tenant once could also build liquid assets at a better return since time is in their favor. buying the s&p over that same 25 year mortgage time frame in a tfsa would possibly make them a millionaire. also in canada people can claim rent as a non refundable tax credit, where you cannot with a mortgage(in the us you can).
a house is a long term savings plan.
housing in canada is a pyramid scheme. a way to net more taxes for the government. this is why I am considering leaving the country and buying in another country.
wowa.ca
