http://www.theglobeandmail.com/report-on-business/rob-magazine/is-the-cmhc-financing-a-house-of-cards/article2137716/

That’s certainly what Americans believed. Through government-sponsored financing entities such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac), the U.S. also raised its home ownership rate to almost 70%—until the foreclosure crisis. The two mortgage giants then became sinkholes for public money, and Washington placed them into conservatorship in 2008. The U.S. home ownership rate is now 66% and declining fast.

Just as the U.S. bubble probably couldn’t have happened without an implicit public subsidy from Fannie and Freddie, the Great Canadian Home-Price Inflation couldn’t have occurred without CMHC. In just six years, its insurance business has doubled, and it now backs more than $500 billion worth of mortgages. Most of these are fine. But about $45 billion is with the riskiest group—buyers with less than 10% equity. These people could be wiped out if there’s a sharp correction.

The banks won’t lose. Only Ottawa will. It’s too late to do anything about those insurance policies now—we’re on the hook. But it’s not too late for Mr. Flaherty to show up at the CMHC board with a new set of orders: Shrink it.

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I know this is not answering poster's query However information given in article can be considered before taking a decision

http://www.canadianbusiness.com/article/33638--rental-complex#

i found this article in Canadian Business Magazine. This article supports rent as compared to buying.

Important lines from article

\"Renters and owners both “throw money away”; the former just toss it to landlords and the latter to bankers. Or as Rabidoux, who’s writing a book about our housing obsession, puts it, “the majority of new homeowners are still renters; they’ve just gone from renting space to renting money.”

\"Several other studies have reached similar conclusions: renting while you conservatively invest your savings is financially smarter than buying a home\"

Five Rules to Remember When Dealing with Real Estate Agents; Why are New Home Sales So Low? How Big is the Pool of Eligible Home Buyers?

http://globaleconomicanalysis.blogspot.com/2011/08/five-rules-to-remember-when-dealing.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

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Ooops..our banks, buyers and agents are different.

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Originally posted by ashedfc

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Originally posted by seenimesh
"Renters and owners both “throw money away”; the former just toss it to landlords and the latter to bankers. Or as Rabidoux, who’s writing a book about our housing obsession, puts it, “the majority of new homeowners are still renters; they’ve just gone from renting space to renting money.”

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Excellent...
Absolutely true.....
People are going crazy from renting space to renting money

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Spot on, Mr. San-Hugo.

My take is this. If you can afford a monthly mortgage installments and have enough dough/cushion for the future then by all means, please BUY (yes, in caps for all my emphasis) and no need to keep sulking in a dark and depressed underground basement suite. This renting vs. owning argument is so lame as to suggest that all renters are finance savvy and invest a great deal. Rather the opposite. I have found these days the home owners are more cautious towards their money than the renters themselves.

Furthermore, if crash occurs then regardless of whether you have invested your money while renting or own a home; you're already doomed. Market crash doesn't differentiate between the renter-invester or the home-owner. If there are home foreclosures, there equally are the people renting high fly in Manhattan who might have invested and lost their fortunes in the market.

Quote:

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Originally posted by seenimesh

I know this is not answering poster's query However information given in article can be considered before taking a decision

http://www.canadianbusiness.com/article/33638--rental-complex#

i found this article in Canadian Business Magazine. This article supports rent as compared to buying.

Important lines from article

\"Renters and owners both “throw money away”; the former just toss it to landlords and the latter to bankers. Or as Rabidoux, who’s writing a book about our housing obsession, puts it, “the majority of new homeowners are still renters; they’ve just gone from renting space to renting money.”

\"Several other studies have reached similar conclusions: renting while you conservatively invest your savings is financially smarter than buying a home\"

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Originally posted by ashedfc

Closing ones eyes doesn't make the problem go away..
In todays world the finance of every country is interconnected globally (i.e. Lehman Brother's problem affected the entire world in 2008)....... Now we are on the cusp of a much bigger problem, where in Europe alone there are atleast 20 Lehman type situations. This time the epicenter is Europe, so you have to watch the events of Europe, as to how its unfolding..

Just a Note "Greek 1 Year Bond Yield Passes 120% !!! Last seen at 122.003%!".. This means, Greece is effectively bankrupt, Greece cannot raise money for itself. Infact, that's not the problem (let Greece go under; who cares), but, this is the source of the problem; we have to wait & see where it affects & what implication this will have on future of the global economy.. One has to look at the Contagion effect, who's next trouble country (& if there is trouble elsewhere; than "How can Canada prosper on its own?" )
There is weakness in the numbers from China/India/allover.. Its not something which should be ignored..

Credit contraction affects availability of credit, which causes corporates to fire employees, & in such a situation mortgage payment can be a big issue (those on the edge will/may come is serious financial stress)..

Above all a General recommendation is not ideal for Individual specific situation. Every family is different, so plan accordingly....

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