Buying vs. Renting in Niagara Falls
posted on October 13, 2022
Niagara Falls, Ontario is a fabulous place to live. It's safe, convenient, fun and full of great work opportunities. If you're ready for a change of pace, this could be the perfect place to call home.
Why we love living here
Niagara Falls is a big city that feels like a smaller hometown. It has all the amenities and perks of a major city, without the harsh rush and impersonal interactions. If you need to be stimulated more, Toronto and New York City are only hours away by train, plane and car.
For those looking for somewhere to build a happy life, this city is a great place to live, work, and put down roots. It has excellent schools, cultural and recreational attractions, a thriving business community, and wonderful neighbourhoods ready to be explored.
Renting vs. buying here
How you choose to live here is worth serious consideration. When it comes to renting versus buying in Niagara Falls, here's what our research shows.
Renting is an affordable option for living in Niagara Falls, Ontario. The current average cost of a one-bedroom apartment rental in Niagara Falls is $1685/month ($20,220/year), and a two-bedroom is $1785/month ($21,420/year). Unlike mortgages, apartment rental prices may already include utilities like hydro, internet and garbage collection.
Buying a home is a much larger investment than renting in NiagaraFalls, Ontario. According to CREA, the Canadian Real Estate Association, the benchmark price for single-family homes in mid 2022 was $701,600. By comparison, the benchmark price for townhouse/row units was $638,500, while the benchmark apartment price was $484,400. The average price of homes sold in August 2022 was $713,022. The more comprehensive year-to-date average price was $819,613.
When you purchase a home you must put a bare minimum of 5% down as a deposit. For the benchmark figures listed above you would need to put down around $35,080 on a single-family home, $31,925 on a townhouse/row house, and $24,220 on an apartment. Then your monthly mortgage rate would be calculated on the remainder amount with an interest rate mixed in (5.25% currently) and a time frame, let's say of 25 years. According to Scotiabank's mortgage calculator, your monthly mortgage rate would be $3972 for a typical single-family home here, $3615 for a townhouse/row house, and $2742 for an apartment. This figure doesn't factor in utilities like hydro, garbage collection or internet. It also doesn't factor in home insurance. These bills can add up to hundreds of dollars per month. The 2022 average cost of utilities in Ontario (electricity, water, cable, gas, internet and home phones) is $282.85/month. With a 5% down payment, monthly mortgage and utilities factored in, you can expect to pay $86,138.20 for a single-family home, $78,699.20 for a townhouse/row house, and $60,518.20 for an apartment in your first year as a buyer, plus about $1400/year for home insurance. Subsequent years would cost $51,058.20, $46,774.20, and $36,298.20 respectively plus about $1400 a year for insurance. That's a big commitment and investment.
Key factors to consider
Home prices in Ontario have been dramatically inflated in recent years, and have recently begun to dip due to the current economic recession. The housing market is volatile and you never know if it may crash in the future. If you choose to buy a home in today's still inflated market, your house value may decline leaving you underwater on your mortgage.
Interest rates and utility costs are also subject to change dramatically, which can heavily impact your costs as a homeowner.
Homeowners are also on the hook for maintenance and repair costs which can be hefty, plus any renovation costs you choose to undertake.
The obvious benefit to being a homeowner versus a renter is being able to potentially sell your home for much more than you purchased it for, making home ownership a seemingly savvy investment in one's lifetime. However, that may not actually pan out as a single-family homeowner. As a renter you can instead invest the money you don't spend on a home purchase to attain a comparable or even better payout.
Peace of mind
Never underestimate the value of peace of mind. As an apartment renter, you don't have nearly as many worries as a homeowner. You likely won't have to shovel any snow in the winter. You won't have to fix a leak in your roof, or buy a new furnace. You won't have to pay a thing if the property manager decides to upgrade your suite with a new kitchen or floor. You won't need to invest in a security system.
To us, it's clear that renting trumps buying in Niagara Falls, Ontario. What do you think?
Looking for a new home in Niagara Falls? Visit our website to see all our available apartments.