Young people are willing to adapt, stressed Kershaw. Many do, working multiple jobs, pursuing higher post-secondary education, and living farther afield, in ever-smaller spaces. “But hard work doesn’t pay off like it used to. That’s what this data shows.”

New data shows it takes 23 years to save for a down payment in Metro Vancouver, and people are working harder than ever to save enough money to ask the bank for a 25 year loan.

That sucks, and we should be doing everything we can to make it easier with policy. I fully support every effort to make housing more affordable.

But what annoys me is that I have yet to find an article that asks what should be an obvious question.

Why do you want to own a home?

I have no desire to own a house. It sounds like a hassle — maintenance, repairs, mortgage payments, and severe limits on location flexibility.

There are two common arguments in favor of buying a house:

It is always a good investment

Ownership = stability

Let’s talk about those.

Is housing a good investment?

I’m not an economist, and have barely done the math.

However, I am smart enough to know that if I’m evaluating the decision to purchase a house primarily as an investment decision, many factors should be taken into account — not just the fact that housing prices seem to go up.

A friend of mine bought a condo in Whistler 10 years ago. He rented it out for the cost of his mortgage. He sold it last year at twice the purchase price.

Here’s what he told me.

“ I would’ve been better off just leaving that money in the stock market. 150k return over 10 years minus taxes and all the crap that came with renting the place was not a great investment.”

That, and the price doubled.

Along those lines, my parents built a beautiful house 10 years ago in South Surrey. A few years ago they sold it for almost 3 times the cost.

Couldn’t ask for a better return, right? Wrong.

Their new house cost just as much.

Unless you’re significantly downsizing or moving locations, even the best housing investments don’t look too great upon deeper analysis.

People forget about opportunity cost

On to the numbers. If I have $50,000 to invest, and the option to borrow $500,000 at a 4.1% interest rate — is buying a condo in Vancouver the best place to park my money?

If it truly is an investment, you should weigh every option for that money.

You could invest in student housing in Halifax.

You could put it into Facebook stock.

You could buy a Villa in Bali to rent out on AirBnb.

You could invest it in starting your own business.

Or you could keep it in savings and have a nice safety net.

As an investment you should look for the highest returns (depending on your risk tolerance) — this is most likely not the BC housing market.

There’s also the fact that the stock market index had a better return than housing on average over the last 30 years*.

(*open to fact checking on this)

Predicting the future

Technically if you are getting a 25 year mortgage, you are making a 25 year bet on your house being a good investment.

Can you really predict what the world will look like in 25 years?

I can’t. Maybe no one will live downtown. Maybe we’ll all live in communes. Maybe skyscrapers will be 5x as high. Maybe we’ll live in floating islands.

Technology (self-driving cars, clean energy, food) will change the makeup of cities in ways we can’t predict. If every job is remote, and you can choose to work anywhere in the world — is Vancouver real estate going to hold it’s value? Cultural shifts could happen that wipe out the value of your investment.

That or a massive earthquake could wipe out your neighbourhood.

For me there’s less risk if I don’t try to predict the future. Keeping your options flexible in a fast-changing world is a competitive advantage. If an earthquake wipes out my rental, I can just leave. Calgary, here I come.

Is ownership more secure?

The goal of housing is to provide shelter. Shelter makes you happier.

In theory owning that shelter is more stable than renting, which should make you happier.

Here’s why that might not be true:

You still need to pay your mortgage. You can always break your lease and move to a cheaper place if your life circumstances change. It’s harder to do that if you’re on the hook for 500k. Yeah, you can sell it — but that’s a hassle. And usually when big crashes happen (which are catastrophic economic events) you will lose both your job, and the value of your home. Hard times.

You may never pay your mortgage off. If your combined take home income is $90,000 and you own a $1.5m house, will you ever really own it? Do the math.

You will need to make more sacrifices to own than rent. A place you can afford might mean a longer commute, a smaller place, and living further away from your friends. Renting happiness isn’t a bad option.

There’s a lot of stuff you have to deal with. Strata, maintenance, repairs, housing market crashes, natural disasters, weird neighbours…

What is more secure — having the ability to move when you want, or a massive bank loan?

But isn’t renting throwing away your money?

If the goal of housing is increasing your happiness by providing shelter, then renting or owning becomes less a romantic ideal and more a mathematical equation.

If you own a house, you are borrowing money and paying interest for that happiness. If you rent, you are paying a monthly fee for it.

Often, you can rent a nicer place than you could afford to buy. If your rental location is closer to your work, quieter, and makes you happier, the extra $300 a month might be a good investment.

Personally I would pay an extra $1000 to live close to my friends, my family, my work, and my sports. If I change my mind, I can move.

These are my current thoughts as a young person living in Vancouver.

I haven’t thought too much about it, because I really like the place I pay $1700 a month to rent in the West End.

I’m neither for nor against home ownership, but I do want better questions to be asked than “how long do I have to work to save for this down payment?”

If the answer to that is 23 years, then the game is rigged. Don’t play it.

Here’s the solution — work a job you like, rent a place you like, save your money for other things, and don’t worry about it.

Think deeper about why you want housing, and adjust your expectations.

Don’t fall for the romanticized notion that working your ass off for 23 years to own a house (that you don’t really own) is the only option, or think that you’re losing because you don’t own one.