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Short Summary
Main recommendation: Renting and investing the difference can be a financially reasonable alternative to buying a home, and Ben Felix's updated 12-city Canadian analysis shows renters ahead of owners on average since January 2005. The average renter-to-owner wealth ratio rose to 1.14 by December 31, 2025, up from 0.99 at the end of 2024, mainly because Canadian real estate continued falling while global stock markets stayed strong. Ben Felix's analysis compares a renter investing the cash flow difference against an owner, and he notes that the result depends heavily on local conditions.
Key Points
- The renter in the model invests 20% down payment plus closing costs and any monthly cash-flow savings in a portfolio of 30% Canadian stocks and 70% global stocks with a 0.25% annual fee, similar to VEQT, while the owner buys with 20% down and a 25-year mortgage.
- Inflation-adjusted Canadian home prices were down 28% as of December 2025, the second-worst decline since 1975 after the 31% peak-to-trough drop in the 1980s.
- Ben Felix says house prices represent discounted future rents, so falling expected rents and higher interest rates pushed prices down, while renters separate housing costs from asset values.
- Owners get protection against being priced out of their city when local housing costs rise, but they take on the risk that property values fall, as they have recently.
- Cities differ widely: Kitchener, Waterloo, and Victoria narrowed to a 0.99 renter-to-owner ratio at year-end 2025 (down from owners being way ahead in 2024), and across all cities no city flipped—owners still led in the same cities as before, though gaps narrowed in some.
Details Worth Noting
- Concrete instructions: Only choose renting if you will actually save and invest the monthly cash-flow difference between owning and renting. Ben Felix stresses that a renter who does not save that difference has no chance of matching the owner's wealth in the model. If you do not trust yourself to save consistently or cannot tolerate stock market swings, owning may make more sense.
- Concrete instructions: The model assumes owners always have enough cash flow to cover property taxes, maintenance, condo or strata fees, insurance, and mortgage payments. Include all of these in your own calculation.
- The model's historical data covers January 2005 through December 2025 (originally run through 2024 and updated) across 12 Canadian cities, with rent rising each year based on each city's historical increases.
- Ben Felix notes owning can still make sense for hedging against local price increases, tax efficiency after maxing out RRSP, TFSA, and FHSA accounts, or wanting to stay in one place, and he owns his own home for these reasons.
- He admits the cost of maintaining and improving his house is substantial and that his family misses some past rentals, though both living arrangements were fine.
Bottom Line
Renting and investing can be a financially sound choice in Canada, but the outcome depends on your city, whether you consistently save the cost difference, and your comfort with stock market volatility. Run your own numbers before deciding.
