For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).
If you are Canadian and you buy or sell U.S. stocks, you need to remember that arbitrage in the stock market is your friend, all the more so when it has an assist from AI, or Artificial Intelligence.
Arbitrage is the simultaneous purchase and sale of an asset in different markets, to exploit tiny differences in prices. We take advantage of it for our Portfolio Management clients whenever we can, to cut their trading costs. Here’s how it works:
If we’re selling a Canadian stock for a client and plan to use the proceeds to buy a U.S. stock, we offer the Canadian stock (on a Canadian or U.S. exchange) for sale in U.S. funds. When we want to sell a U.S. stock to buy Canadian, we reverse the order and offer the U.S. stock for sale in Canadian funds.
Now that you can buy and sell in either currency on both sides of the border, arbitrageurs (also known as “arbs” — traders who buy and sell in two different currencies simultaneously) constantly monitor trading activity to spot slight differences in one currency versus the other. When they spot any such difference, they simultaneously buy the stock where it’s cheaper and sell it where it’s more expensive, eking out a tiny profit on the difference.
This trading activity serves to cut cross-border share-price differences to the point where they are, for practical purposes, negligible. This makes the markets more liquid. It cuts trading costs for everybody. Continue Reading…
By Dana Anspach for Fritz Gilbert and The Retirement Manifesto
Special to Financial Independence Hub
Like many teenage girls, I had my high school bedroom walls covered in posters. Actor Rob Lowe took center stage, with a bit of Matt Dillon sprinkled in. (Ladies of the ’80s … any of you relate?)
Mixed in with the heartthrobs were glossy posters of red sports cars. Ferrari. Lamborghini. Later, in college, an Acura NSX.
Looking back, it’s strange. I’ve never been much of a car person: especially not sports cars. I don’t see well out of them. They’re low to the ground. I scrape rims, bump curbs, and the quick handling leaves me feeling slightly queasy.
So why the fascination?
I think those cars represented success. Flashy. Fast. The kind of thing people ‘oohed’ and ‘ahhed’ over.
Defining success by external standards is dangerous business. Thankfully, I outgrew that particular distortion: though I’m sure plenty of others remain.
As an adult, I gravitate toward practical, balanced cars. What I think of as the all-weather vehicle. I don’t need to go 200 mph down the autobahn. But I do want traction in heavy rain. I don’t care about making a statement at the valet. I care about glancing in the rearview mirror and seeing my dog’s smiling face as we head to his favorite place on earth: the park.
That preference for balance turns out to matter far beyond cars. It’s also the way I believe we should approach retirement planning and investing.
The Case for an All-Weather Approach
In hindsight, those sports car dreams and investing have something in common. Sometimes, it’s hard not to hop into the shiny red sports car and drive away.
In investing, a shiny investment (like the shiny red sports car) promises speed and excitement. It may not be as reliable, but for a brief moment, it makes us feel brilliant. Powerful. Maybe even a little invincible. In touch with our inner James Bond. And who doesn’t want to feel like a secret service spy just once in their lifetime?
Often, it shows up as a single stock. Sometimes it’s a real estate deal. Or a business venture. It feels adventurous. Sophisticated. Like we’re seeing something others don’t.
In the late 1990s, tech stocks were the shiny red sports car.
The firm I worked for at the time offered a Science and Technology Fund that rose 99% in twelve months. One day, a middle-aged couple came in and asked me to move their entire portfolio into it.
Durability vs. Speed
Their portfolio had been built for durability:
blue-chip stock funds,
international exposure,
a few bond funds,
and a small allocation to the Science and Tech Fund.
They had spent a year watching the tech fund soar, while everything else stood still.
I balked at their request. I explained the logic of balance. Sure, in perfect weather, the shiny red sports car looked great. But the weather wouldn’t always be so accommodating.
My logic sounded silly to them: like a mom insisting you put on your helmet to ride your bike down the street.
They insisted on the change. I acquiesced on one condition: they sign a disclosure acknowledging that this was against my recommendation. They signed without hesitation.
I left that firm before the dot-com crash and the miserable weather that followed. I’ve often wondered what happened to that couple. The allure of speed was too strong.
Today, I see that allure creep in when retirees keep a “play” account. They go all in on a few stocks and attribute their success to their stock-picking prowess.
You can go all in with a play account. But a professional financial advisor can get sued if they do the same thing with your entire life savings. That should give you pause. Risk and return are sides of the same coin. But each time you flip, if it’s several years of heads, it is all too easy to forget that the coin even has another side.
Beware the Slight Upgrade
Not everyone is tempted by flashy sports cars. Sometimes the pull is subtler.
We start to think maybe a small upgrade will help. Something just a little faster. A little more responsive. Even if it doesn’t handle storms quite as well.
I watched this at the end of 2024 when a long-time client, whose retirement plan and portfolio were in solid shape, left because they felt they should be earning higher returns. Continue Reading…
Why I do not recommend them — private or liquid — and what most investors do not fully understand
Unsplash: Markus Winkler
By Steve Lowrie, CFA
Special to Financial Independence Hub
I am often asked about alternative investments. My first response is always the same: alternative to what?
Because most of what is being presented as “alternative” is not something new or better. It is often the same wine in a different bottle.
I do review alternative strategies, as I look at all types of investment strategies, but from a high-level, evidence-based perspective. Not by spending time on the individual deals and marketing pitches that arrive almost daily.
Let me be direct. Despite the heavy marketing push behind private credit, private equity, liquid alternatives and similar strategies, I do not recommend them. I have not recommended them in the past, and I do not recommend them now.
In my experience, investors in these structures often do not fully understand what they own, how they are priced, when they can access their money, or the underlying risks.
Those are not minor details.
A recent reminder
At a portfolio manager roundtable a few months ago, one advisor shared that more than half of his clients’ assets were invested in private alternative structures. It was presented as a sign of sophistication.
Only a few months later, U.S. press coverage began highlighting private-credit funds facing large redemption requests. In response, many of these funds have been limiting withdrawals or placing restrictions on how much investors can redeem.
Closer to home, several large, well-known Canadian alternative asset managers have recently halted redemptions, leaving investors unable to access their money for extended periods. If you have lived through that, you already know how it feels. If you have not, the experiences of those investors are worth taking seriously before you ever considered investing.
None of this should be surprising. If you invest in illiquid assets, there will be limits on liquidity. The underlying investments, such as private loans or real estate, cannot be sold quickly. That is how the structure is designed.
The concern is that this reality is often lost in how these investments are presented.
When new information becomes available, it should shape how we think about risk.
It raises a more important question. Is this actually improving outcomes for clients, or is it introducing risks that have not yet surfaced?
Concentrating that much of a portfolio in illiquid, opaque investments is not sophistication. It is risk, just not the kind you see right away.
What are alternative or private investments?
Alternative investments are investments that are not publicly traded. They include private credit (lending directly to businesses), private equity (ownership in private companies), direct real estate or infrastructure assets held in pooled structures.
The key difference is not what they invest in, it is how they are structured. These investments vehicles are:
Not continuously priced
Not easily sold
Not fully transparent
The underlying exposures, corporate lending, real estate, business ownership, can all be accessed through public markets. The issue is the structure, not the asset class. I have made this point before in the context of real estate, where publicly traded REITs offer a cleaner path than direct property ownership, and in the context of gold, where exposure already exists indirectly through the broader market.
Why are these strategies being sold so aggressively to individual investors?
The pitch typically centres on three claims: better diversification, lower volatility, and higher expected returns. These claims do not naturally go together. Higher expected returns typically come with higher risk, not less.
There is some historical basis for this, but only in a very specific context, and one that is not usually explained clearly.
What about the endowment model?
A common argument from advisors recommending alternative investments is that large U.S. university endowments, such as those at Harvard, Princeton, and most famously Yale, have used meaningful allocations to private investments for decades and have generated strong long-term returns.
A bit of background: The Yale Endowment, under the late David Swensen, became the most well-known example of what is sometimes called the “endowment model” – a portfolio approach that allocated heavily to private equity, hedge funds, real assets, and other alternatives, rather than to traditional stocks and bonds. The strategy delivered strong results over an extended period, and many other institutions tried to copy it.
That history is real. But two things are worth noting before applying it to an individual investor’s portfolio.
First, those results depended on advantages most individuals cannot replicate: first-look access to the very best private fund managers, negotiated fee structures, multi-decade time horizons that genuinely do not need liquidity, and full-time investment teams to perform deep due diligence.
Second, the asset class itself has changed. As private investments have been packaged for broader distribution, more capital is chasing the same opportunities, the return advantage has narrowed, and the best managers are generally not the ones marketing to retail and mass-affluent investors. Even some of the original endowment-model institutions have been reassessing their allocations.
What has worked well in the past is often difficult to repeat going forward.
In some cases, sophisticated investors are reducing exposure while less experienced investors are being encouraged to step in. Whether intentional or not, that raises an important question. Is this about better investing, or better marketing?
Is the illiquidity a problem?
Yes, it can be.
There is a concept known as the illiquidity premium. If you give up access to your money, you should expect a materially higher return in exchange.
For that trade-off to make sense, two things must be true. You actually receive the higher return, and you fully understand and accept the loss of liquidity.
What we are seeing now raises questions about both. Liquidity rarely feels important until the moment you need it and that is typically when it matters most.
As an example, several large alternative asset managers, including in Canada, have had to limit withdrawals, delay redemptions, or fully gate funds. Gating means you ask for your money back, but you cannot get it on your timeline. You get it at the manager’s discretion. And this often happens at the same time the underlying investments are under pressure, which is usually the reason for the restrictions in the first place.
Why do private investments appear so stable?
Because they are not priced in real time.
Private investments are typically valued periodically, often using models rather than actual transactions. That creates the appearance of smoother returns. But smoother does not mean safer.
Lower reported volatility often reflects how the investment is priced, not what is actually happening underneath.
It often just means changes in value are being reported more slowly.
A recent Dimensional article makes this point clearly. Without continuous pricing, it is difficult to assess the true condition of private credit investments, and publicly traded proxies may provide a more current signal. Exhibit 1 in the Dimensional piece shows that while broad stock and bond markets were positive over the past year, a publicly traded proxy for private credit declined by more than 13 per cent.
That difference is not trivial, and it highlights how private valuations can lag what is happening in real markets.
What about liquid alternatives?
A common response to the liquidity concerns above is: “But what about liquid alternatives, the ones offered as ETFs or mutual funds with daily liquidity?”
These products solve the liquidity problem on the surface. You can buy and sell them like any other fund. But they do not solve the underlying problem with the strategy.
The fees are still high, often well above what you would pay for traditional equity or fixed income exposure. The strategies inside are often complex, opaque, and difficult to evaluate. And the long-term net-of-fees track records of many liquid alt strategies have been weak or negative.
There is also a more subtle issue. When a fund offers daily liquidity for strategies whose underlying instruments are not themselves daily-liquid, the wrapper is promising something the underlying cannot reliably deliver. Under normal conditions, this is not visible. Under stress, it can be.
Changing the wrapper does not change the strategy. If the underlying approach is expensive, complex, and unlikely to add value over time, putting it in a more liquid package does not fix that. It just makes it easier to buy.
So no, I do not recommend liquid alternatives either.
A simple framework for evaluating any investment
When clients ask me about a new investment idea, I encourage them to ask three questions before going further:
Does it produce a reliable expected return that compensates me for the risk?
Can I access my money when I need it?
Can I clearly understand what I own and how it is priced?
Most alternative investments, private or liquid, struggle to meet all three.
There is also a common belief that access to private investments provides an advantage. In reality, broader access often comes after the most attractive opportunities have already been captured.
That does not make them useless in every context. But it does make them difficult to justify as a meaningful holding in a long-term portfolio. Continue Reading…
‘Cause I wanna be the minority I don’t need your authority Down with the moral majority ‘Cause I wanna be the minority
Minority, by Green Day
I Stand Corrected
In past commentaries, I stated that (1) forecasting the future is next to impossible, and (2) it is therefore of no use when it comes to successful investing. After careful consideration, I acknowledge that there are exceptions to my first statement. I nonetheless maintain that forecasts, even to the extent they are accurate, are generally of no use when it comes to achieving better than average investment results.
Most people assume that accurate forecasting and outperformance go hand-in-hand. As such, my contention that accurate forecasts do not generally lead to outperformance seems paradoxical. This month, I will explain why, despite my change of heart when it comes to some peoples’ ability to forecast, I am holding steadfast to my belief that forecasting and investment results are fundamentally estranged.
Accuracy and Success are not Synonymous
There is a saying that if you are being chased by a bear, “You don’t have to run faster than the bear to get away. You just have to run faster than the person next to you.” With respect to forecasting, the ability to outperform doesn’t stem from making accurate predictions, but rather from making predictions that are more accurate than those of others.
Contrary to popular opinion, economic developments or corporate earnings do not move markets. Rather, it is only when such events come as a surprise that meaningful movements in asset prices occur.
Imagine a scenario where you position your portfolio based on a forecast for strong economic growth, low unemployment, declining inflation, and falling interest rates. If (1) your predictions turn out to be correct and (2) most market participants have the same view, your performance will be average. Your forecast would already be reflected in security prices, resulting in average performance.
Similarly, reactions to earnings announcements show that it’s not earnings per se, but rather earnings which come as a surprise (that differ from what the consensus was predicting) that cause meaningful movements in stocks. The stock price of a company that reports a doubling of earnings will not necessarily rise and may even decline. If most investors had predicted that the company would grow its earnings by less than 100%, the price of its shares would likely rise after its earnings announcement. However, had the consensus been for earnings growth of more than 100%, its stock would likely decline. Most likely (yes, the consensus is right most of the time), the majority would be expecting earnings to double, in which case there would be little if no post announcement movement in the company’s stock price.
The upshot is that even when forecasts are accurate, they generally don’t result in above average performance. It is only forecasts that both differ from consensus and are correct which result in superior performance.
Easier Said than Done
Just as being no faster or slower than the other person being chased by a bear does not guarantee your survival, accurate forecasts don’t lead to superior performance if the consensus forecast is similarly correct. Unfortunately, the other person being chased by the bear is damn fast! The consensus view is right most of the time.
If consensus forecasts are usually correct, then by definition contrarian ones are more often than not incorrect. Consequently, non-consensus and accuracy, the two forecasting characteristics required to achieve above average results, generally stand in opposition to each other. Pick your poison: either stick with the consensus and deliver average results or stray from the crowd and run a high risk of underperformance.
The Past is the Best Predictor of the Future … Until it Isn’t
Most forecasters are incrementalists: they use current conditions as a baseline and then make only minor adjustments depending on their respective views.
Things generally continue as they have been. Economic expansions and bull markets tend to last several years. Years in which stocks rise tend to be followed by further gains in the following year. Given this pattern, incremental forecasting tends to work most of the time.
The minority of occasions when consensus forecasts fail — which are also when non-consensus forecasts can add the most value — tend to happen during major turning points in markets, which are the exception rather than the rule. Not only are such sea changes extremely difficult to predict, but they are also hard to act on.
There’s no Point in Explaining to Someone who doesn’t Want to Listen
During the late 1990s tech bubble, most investors were convinced (or convinced themselves) that markets were experiencing the dawn of a new era abounding with limitless possibilities. A “no price is too high” mentality permeated the masses’ minds, causing tech stocks to rise at a parabolic rate and reach unsustainable valuations. Similarly, by the mid 2000s, the consensus view was that real estate was a bulletproof investment which could only go up, causing home prices to become completely detached from fundamentals and leading to lending practices that were profoundly estranged from risk management.
Notwithstanding the bitter endings to these episodes, there were few forecasters at the time who were willing to take a sober and skeptical view of what was bordering on utter lunacy. Perhaps more importantly, few investors were willing to listen to those who did, dismissing them as being “tone deaf” to what was perceived as a new reality in which the old rules did not apply. When the party is in full swing, nobody wants to either be or listen to the naysayer warning of impending hangovers.
Being Right isn’t Enough: You need to be Right Soon
Forecasts that can produce outperformance not only necessitate accuracy and straying from the crowd at times when it is most difficult to do so but also require precise timing. It’s hard enough to predict inflection points in markets, but predicting the precise timing of such pivots is next to impossible.
Among the few lonely souls who saw trouble brewing in the late 90s tech bubble or the early 2000s real estate craze, most of them were devastatingly early. Both tech stocks and real estate continued to appreciate at a torrid pace after the few naysayers (who were largely ignored) began ringing alarm bells. Few contrarians had the resolve to stick with their views as prices continued to rise, even though their predictions were becoming more likely as valuations became increasingly unsustainable.
A correct insight which is too early can lead to losses, insolvency, or ridicule. As legendary investor Howard Marks stated, “Being too far ahead of your time is indistinguishable from being wrong.” Even John Paulson, who eventually made billions in profits by shorting the U.S. housing market in 2006, had to endure massive losses in 2007 before his bet paid off.
Career Risk & Safety in Numbers
In the world of forecasting, being wrong can be very detrimental, particularly with respect to one’s career and credibility.
Most forecasters got caught flat footed when markets began reeling in 2000 and 2008. However, they could take solace in the fact that they were in the majority, which provided them with sufficient cover. On the other hand, being wrong on a contrarian view can have devastating consequences. The asymmetric risk of differing from the crowd is best described by John Maynard Keynes’ observation:
“It is the long-term investor who will in practice come in for the most criticism. For it is the essence of his behaviour that he should be eccentric, unconventional and rash in the eyes of the average opinion. If he is successful, that will only confirm the general belief in his rashness; and if in the short run he is unsuccessful, which is very likely, he will not receive much mercy. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
Those who Tell don’t Know. Those who Know don’t Tell
Cynically speaking, if someone had the ability to make accurate, non-consensus forecasts that could generate better than average performance, why on earth would they share them? Such skills could produce returns that would make Buffett look like a chump. Those with such prowess (who are rare to non-existent) would be far better off following their own advice rather than wasting their time convincing others to follow it!
Algorithmically Embracing the Unknown
At Outcome, our views on forecast-based investing are best summed up by H.L. Mencken’s assertion that “We are here and it is now. Further than that, all human knowledge is moonshine.”
We always have and continue to shun forecast-based investing, with which we believe neither we nor anyone else can add value. We will continue to apply our machine-learning based investment models to markets that are subject to behavioural biases and non-economic motivations to deliver outperformance over the long-term.
Of note, our approach to investing has consistently enabled the Outcome Canadian Equity Income Fund to mitigate losses and preserve capital in challenging markets, with last month being no exception. In March, the TSX Comp. Index declined 4.3%, while the S&P 500 Index fell 5.0%. In comparison, the Outcome Canadian Equity Income Fund rose 0.7%.
Noah Solomon is Chief Investment Officer for Outcome Metric Asset Management Limited Partnership. From 2008 to 2016, Noah was CEO and CIO of GenFund Management Inc. (formerly Genuity Fund Management), where he designed and managed data-driven, statistically-based equity funds.
Between 2002 and 2008, Noah was a proprietary trader in the equities division of Goldman Sachs, where he deployed the firm’s capital in several quantitatively-driven investment strategies. Prior to joining Goldman, Noah worked at Citibank and Lehman Brothers. Noah holds an MBA from the Wharton School of Business at the University of Pennsylvania, where he graduated as a Palmer Scholar (top 5% of graduating class). He also holds a BA from McGill University (magna cum laude).
Noah is frequently featured in the media including a regular column in the Financial Post and appearances on BNN. This blog originally appeared in the March 2026 Outcome newsletter and is republished on Findependence Hub with permission.
I originally wrote this article about buying a house in Canada back in 2021: right as the price of housing was picking up. I’ve kept it updated over the last few years as it caught the attention of Rob Carrick over at the Globe and Mail, as well as a few other big names. Five years after writing the initial version of this article, the value proposition on buying a house in Canada has certainly changed!
2026 Editor’s Note: I still don’t own a home, and while I’m not 100% averse to the idea of owning one day, that day is definitely not in the near future
Image by satheeshsankaran from Pixabay
By the end of the summer I will no longer be a homeowner.
In many countries that statement would be a simple matter of personal finance. Selling an asset, paying off a loan (mortgage) and moving on to another living space.
But not in Canada.
No, in Canada selling our house means that my wife and I are making a massive change to our identities. A core shift in our very essence.
Many would say we are taking a careless step backward on the path to living a fulfilled “real adult” life.
Several friends and family will likely believe that we are crazy for tossing away “the best investment one can ever make.”
The absolute obsession with homeownership in Canada continues to astound me. The emotional connection between Canadians and their real estate has been well documented, but that doesn’t make it any more logical! Even though my wife and I have owned a home for years, this was much less because we subscribed to the traditional “own at all costs” mentality, and more due to the fact that rural Manitoba housing vs rent decisions are quite different than most places in Canada.
We’ll certainly miss some of the small luxuries (goodbye big garage) of our old home, but here’s some of the reasons why we believe selling our house will be a weight off of our shoulders.
1) Endless Fear of Hearing a Strange Noise
Is that the furnace taking its last breath?
Perhaps it’s the water treatment system deciding to spring a leak?
Is that rain I hear: is it possible our septic system is backing up?!
My dad loves fixing stuff. His day is not complete until he has improved the physical world around him.
I am not my dad.
My lack of handyman skills has now become a joke that I’m comfortable laughing at, but for years I was incredibly self-conscious about possessing nearly zero masculinity-affirming fix-it ability. You want someone to work hard doing menial chores such as cutting lawns, raking leaves, shovelling snow, or lifting heavy things from Point A to Point B: I got you covered.
Anything that requires technical skills or mechanical problem-solving ability … not so much.
Because my father’s handyman-dominant brain was not passed down to his oldest son, I lived in perpetual fear of things breaking when I owned a home. I never really got this “pride of ownership” thing. For me it was definitely more of a “fear of ownership.” I had so much of my net worth tied up in this one asset – which required constant maintenance – and I really had no idea what it was doing. “Learning by doing” constantly scared me as errors were quite costly.
Hiring any specialized help on something like an air conditioning unit always seemed to cost triple what was estimated, so that just exponentially added to my anxiety levels around maintenance.
Renting = not my problem!!!
2) Is Renting still a Better Financial Decision than Buying in 2026?
Back in 2021 I wrote that it was “quantifiably true” that renting was better than buying. In fact, I went on to say:
I know … that’s a big statement.
It’s probably worth an article all on its own.
It will probably lead to crazy comments (as all real estate articles in Canada do): Editor’s Note: It did!
iii) Here’s Ben Felix’s 5% rule in action. I personally believe that Ben is shooting a bit high on real estate estimates (today’s giant houses are not comparable to historical returns data he quotes), and a bit low on property taxes + maintenance costs. He also isn’t factoring in closing costs (which are a pretty big deal when you move the number of times the average Canadian does), nor the difference between renters insurance and home insurance.
I do like his methodology, but the 5% rule of thumb for non-recoverable costs is pretty badly slanted towards real estate due to the factors mentioned above. I could probably live with a 6% rule: (speaking as a soon-to-be former homeowner of ten years).
Editor’s Note: Ben has done a ton of work in the rent-vs-buy realm since 2021. I still think he’s underestimating maintenance costs, as inflation rates on tradespeople over the last 10 years are really high even relative to overall inflation. His most recent deep dive shows that renting still wins out the majority of the time (even during a massive boom for housing in Canada vs the Great Recession in stocks in 2008).
iv) I’ve talked to many real estate experts who claim “the 1%” rule of thumb is a great filter for a potential landlord looking to add a revenue-generating property to their real estate portfolio.” That means that if you can’t get at least 1% of your purchase price in monthly rent, then it’s not really worth considering the property.
The flip side of that is that if you’re renting for substantially less than 1% of the purchase price of a comparable home: then you’re getting a good deal. Bryce over at Millennial Revolution explains his rule of 150 which comes to similar conclusions.
Those are all great looks at accurately comparing financial costs vs benefits of purchasing a house to live in.
2026 Update: I continue to think these are great rules of thumb for comparing renting and buying. So let’s take a look at how these rules would guide us as we look at rent and buying across Canada in 2026.
Toronto Real Estate
The average price of a property sold in the GTA in March of 2026 was $1,017,796. Interestingly, that’s actually slightly less than when we looked at this in 2021 ($1,108,453) while the average rent is closer to $2,250 (up slightly from $2,100 in 2021). Before we crunch the numbers, it’s interesting to note that both purchase price and rent have went up at a rate less than general inflation since 2021!
Our 1% rule landlord of thumb says that a $1,050,000 house better get you $10,500 per month in rent: or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is WAY ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $5,250 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $4,375 to be a good deal.
Bryce’s preferred rule of 150 means that the $2,250 rental average, would dictate a mortgage payment of $1,500 as a good measuring stick for if they should buy.
Conclusion: By any measure … It’s still a better deal to rent in Toronto, even though the price of homes hasn’t gone anywhere in 4 years!
Buying a House in Calgary
Back in 2021, Calgary was still recovering from the oil shock. These days, we see that rents and property values have increased substantially.
The average rent in Calgary is roughly $1,700 (compared to $1,200 back in 2021) and the average cost of a property has gone from $510,000 to about $616,000.
Our 1% rule of thumb says that a $616,000 house better get you $6,160 per month in rent; or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is substantially ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $3,080 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $2,567 to be a good deal.
Bryce’s preferred rule of 150 means that the $1,700 rental average, would dictate a mortgage payment of $1,133 as a good measuring stick for if they should buy or not. A $1,133 mortgage would correlate to a purchase price of roughly $250,000.
Even with rental prices going up at a much faster rate than home prices, it’s still a good deal to rent in Calgary!
Home Prices in Halifax
Back in 2021 I decided to throw Halifax into the mix as a substantially different housing market than the big cities like Toronto and Calgary.
In 2026 the average rent in Halifax is about $1,900 per month (versus $1,600 back in 2021) and the average cost of property has risen from $465,000 to about $560,000. (Just a note, these are weighted averages taken from across all home types.)
Our 1% rule of thumb says that a $560,000 house better get you $5,600 per month in rent: or it’s not a good buy.
Using John’s or Preet’s calculators we see that renting is substantially ahead given these parameters.
My modified Ben Felix 6% rule tells us that if we can rent for $2,800 or less: then it’s a pretty good deal to rent. If we stick to his original 5% rule, we need to rent for less than $2,333 to be a good deal.
Bryce’s preferred rule of 150 means that the $1,900 rental average, would dictate a mortgage payment of $1,267 as a good measuring stick for if they should buy or not. A $1,267 mortgage would correlate to a purchase price of under $300,000.
Canada’s current price-to-rent levels are 574% higher than they were in 1970.
Since 1970, Canada’s price-to-rent level has risen at roughly 21x as quickly as the USA’s.
Canada’s current price-to-rent levels are substantially higher now than the USA’s was before their 2008/09 housing crash.
In 2026, I’d add to this:
Our current price-to-rent levels aren’t much changed in 2025, and are still WAY higher than in 1970 (we’re now at about 587% versus 1970).
Since 2021, the U.S. market has cooled slightly more than the Canadian market has, thus exacerbating that comparison point.
Rent dynamics are flipping as supply catches up. After rents jumped 6.3% in 2023 and 7.9% in 2024, vacancy rose from 1.5% (2023) to ~2.3% (2024). Rents have now declined in Canada for 18 consecutive months according to Rentals.ca. Result: asking-rent growth is easing, especially in older stock.
Population policy is easing some demand pressure. Ottawa lowered permanent-resident targets and, for the first time, set caps on temporary residents (aiming to reduce the temp-resident share toward 5% of the population). CMHC explicitly baked in “weakening migration” into its 2025 call for higher rental vacancies.
Clearly, while the numbers have changed slightly, there aren’t really any new conclusions to draw from the rent vs buy math alone.
3) Opportunity Cost of being Rooted into Place
I grew up in a single house: owned by a homeowner. (My parents were unique in that my dad built his own house on a very cheap piece of rural land and never took out a mortgage. Feel free to try and copy that strategy in 2021.)
It was really nice. I get that there can be some very pleasant reasons to own the house/condo that you live in.
But let’s be honest about the big picture here: there are some large trade-offs involved.
Buying a home makes you much less likely to move in order to accept a promotion or career opportunity. That’s impossible to quantify, but it’s a really significant consideration.
One of the quickest ways to climb in any industry (or even make an advantageous jump to a new industry) is to be willing to move to where the opportunity is. The cost to your career of feeling as if you are anchored to the house you worked so hard to get into could be massive!
4) Our Brains Work Differently when we think about Renting a Place to Live vs “Buying a Forever Home” – Lifestyle Inflation is Almost Inevitable.
Funny things begin to happen as we approach the leap from renter to homeowner. Suddenly, cost-benefit calculations we were doing about third bedrooms or fancy kitchens fly out the window … only the best will do for our “forever home” after all.
Weird mantras like, “We’ll grow into it,” begin to creep into our heads and suddenly we’re looking at fancy countertops, upgrading bathrooms, etc.
I’m not sure whether to blame HGTV and the homeshopping shows or what it is, but there is no doubt that most of us look at properties completely differently whether we are renting or buying. Keeping up with the Joneses becomes so much more important (is this what “being a real adult” is truly all about?) when you’re buying and furnishing a house.
One thing that we have learned from moving overseas is that we can be 98% as satisfied in a two-bedroom apartment as we were in our large bungalow. Now, I hear you that things might be different if you have a young family. I’m sure this equation changes substantially when adding children to the picture, but when you look at the smaller average house size that the larger families of yesteryear were raised in, it raises some interesting questions about how much room we all need to be happy.
5) “Drive until you Qualify” = Too Much Driving
I have consistently found that we underestimate the cost of driving: in both lifestyle and dollars!
There have been many studies done on how spending time in the car can really impact your physical health in a myriad of ways. It doesn’t take a genius to figure out that the more time you spend sitting by yourself (often stuck in frustrating traffic) the less healthy and happy you are likely to be.
Maybe this work-from-home thing is going to reduce these financial and physical costs … but I have my doubts as to how many people this will actually affect a few months from now.
When calculating how much your commute will cost you, one needs to factor in depreciation and repairs, in addition to the price of gasoline (or perhaps electricity) and possibly parking. The government of Canada believes it costs about $0.73 per km to drive, while CAA posts similar estimates (and that’s prices from before the recent surge in Canadian gas prices).
At 260 work days per calendar year, every km you move further from your workplace will cost you about $380 per year! If you have two working adults that are both commuting in your household, it doesn’t take long for those numbers to really add up.
6) My House is Definitely NOT the Best Investment I’ve ever Made
If the real estate boosters didn’t try to burn down this website after reading the rent vs own comparison earlier in this article, they will surely reconsider after reading this.
If I’ve heard it once, I’ve heard it two hundred times: “My house is the best investment I’ve ever made.”
While I have written extensively on this topic (and had to explain the point to many parents in the course of teaching personal finance over the years) there is simply no debating the following considerations about owning your home from an investment perspective. Note: We’re not talking about owning a rental property here: that’s a much different conversation.
There are many reasons why the Holy Grail of investment advice is Thou Shalt Diversify. Tying up all of your cash (and then borrowing huge amounts of money that tie up all future earnings) is NOT diversification. Having your entire net worth determined by one building in one location is not a smart risk management decision.
Why is it that when people borrow money to invest in the stock market (known as leverage) it’s considered inherently risky, but when people borrow 9x their downpayment on a house it’s considered “common sense”?
When we think about how much money we’ve “made” on our home, we often forget to include all of the non-recoverable costs involved such as taxes, maintenance and repair costs, transaction fees to buy & sell, renovations that cost way more than they added resale value, etc.
The Case-Shiller Housing Index has stated that between 1928 and 2013, the average annualized rate of return for American housing was 3.7%. The average annual rate of return for American stocks was 9.5% during that time period. Canadian housing and stocks track much the same path.
The National Association of Home Builders in the USA has stated that the average home in 1950 was 983 square feet, and by 2015 it had nearly tripled in size to 2,740 square feet! When you adjust for this fact, the actual increase in value per-square-foot of house is much smaller than the 3-4% number that is commonly tossed around in both Canada and the USA. Likely more in the 1.5-2% territory.
If you think that the last few decades have been the “golden age of Canadian real estate” then you might be surprised to find out that since 1982, Canada’s house prices have only gone up an average of 1.7% per year (vs an average inflation rate of 2.46%).
House values do NOT always go up : no matter what your friend in Toronto says. Go back and ask a Floridian in 2008 or a Calgarian in 2014.
Remember, these considerations are looking backwards at record return decades for Canadian real estate. We are now likely close to the top of that mountain (if not at the peak), so going forward …
Alternative investments to Canadian real estate: View our guide about Canada’s best dividend stocks if you want to learn more about beginner-friendly ways of investing your money into safe non-real-estate assets.
7) Freedom to Travel … Forever
Ok, so this one is likely somewhat unique to us.
I get that not everyone wants to spend years travelling without a fixed address.
That said, I think most Canadians would be amazed at how cheap it is to travel months on end if they don’t have to pay a mortgage back home, and don’t have to fly during the peak weeks of the year. I know that my wife and I were astounded when we went down the digital rabbit hole and found out just how many people were “slow travelling” 12-months per year for under $25,000 CAD.
I don’t think we’re quite as frugal as many of these veteran travellers, but after some pretty extensive research and many conversations with people actually living the “digital nomad” or “FIRE” lifestyle, we think we could pretty easily mix 6 months in relatively expensive countries like Canada, the USA, Western Europe, etc, with 6 months in cheaper countries centred on Eastern Europe and SE Asia, for $40,000 CAD.
2025 Update: My wife and I actually did this last year. We spent 3 months at our family cabin in rural Ontario, then went to Portugal for three months, Thailand for two months, Bali for a month and Japan for a month.
All-in, the price tag came in around $45,000. That includes many flights, an excellent cheap ticket on a Japanese cruise sale, several 3-to-5-day stays at luxury resorts, and several months in good-to-great Airbnbs. Financially, it was a success. It was a bit lonelier than we anticipated at times: but that’s not the math’s fault!
Beyond the obvious fun of seeing more of the world, we love the idea that we will get to spend more time with friends and family that don’t live close to where our 9-to-5 jobs were in rural Manitoba.
AirBnb and competing rental platforms have really changed the game when it comes to attempting to live this “no fixed address” lifestyle. With monthly discounts and competition keeping prices low, finding a place to live for 1-3 months has never been so convenient or affordable. If you want to be responsible for someone’s pets, there are even more affordable travel opportunities available!
Canadian Housing Prices in 2026 (How Expensive is Canada Really?)
After we wrote about gas prices in Canada a couple of weeks ago, I thought it might be useful to take a look at housing affordability in Canada for 2026.
If you’re wondering just how expensive housing has gotten in Canada over time, you can take a look at the inflation-adjusted Canadian house prices charts below. The first one I put together to show just how much faster Canadian housing has went up relative to the average overall inflation (and don’t forget that housing is actually a pretty big part of the overall CPI basket as well, so that means that the gap between housing and “everything else” is actually larger than what you can see here.
Then, I wanted folks to be able to see in real dollar terms just how expensive housing has gotten in Canada and why some folks call it a housing affordability crisis.
It’s pretty clear to see that the cost of living in the Canadian housing category has went up significantly in the last 20 years.
It’s also interesting to note that while Canadian real estate gurus like to say, “Oh the market is just taking a bit of a breather until it goes up again: it has hardly gone down at all.”
… That’s not exactly true in real-life.
Because inflation has been somewhat high the last few years, we see that in inflation-adjusted terms, Canadian housing has actually lost a substantial amount of value. When you compare that to the massive stock market returns of the last five years, I’d say my 2021 housing sentiment holds up pretty well!
The good news is that housing affordability in Canada has improved slightly in the last few years. The bad news is that the overall cost of living for the housing category is still way higher than it was even 20 years ago.
Canada Cost of Living: Housing Costs
I still think a lot of Canadians underestimate where their total housing costs come from. I have yet to meet a homeowner of more than a few years (who didn’t buy new) who thinks they only spend 1% in maintenance. I also think that we look at our mortgage payment and we don’t totally mentally calculate how much of that is interest.
Let’s take a quick look at a plausible home ownership case. Helen the Homeowner decides that she’s ready to take the plunge and buys a $700k house in a small Ontario city.
She has diligently saved up the 70K that she needs (making good use of her FHSA and RRSP). With 10% Helen is going to need a mortgage for nearly $650k because as a high-ratio insured mortgage, she is going to owe some extra. Here’s a rough idea of what her total housing cost of living will be over the next 25 years if she averages a 4.3% mortgage interest rate (pretty generous by historical standards). I’m keeping everything in 2026 dollars here for ease of comparison.
Down payment: $70,000
Home principal repaid: $630,000
Mortgage interest: $407,403
CMHC insurance premium: $19,530
Ontario tax on CMHC premium: $1,562
Property tax: $131,250
Home insurance: $37,500
Maintenance: $262,500
Ontario land transfer tax: $10,475
Total 25-year out-of-pocket cost: about $1,570,220
So for the first 25 years of home ownership, that works out to the following breakdown:
Home principal repaid: 40.1%
Mortgage interest: 26.0%
Maintenance: 16.7%
Property tax: 8.4%
Down payment: 4.5%
Home insurance: 2.4%
CMHC premium: 1.2%
Land transfer tax: 0.7%
Tax on CMHC premium: 0.1%
It’s interesting to note that the actual price of the home is significantly less than half of the total housing cost of living.
It’s OK to Own a Home – and It’s OK NOT to Own one Too!
It’s odd to say, but that makes it no less true: Owning your home in Canada is an emotional decision heavily tied to middle-class identity.
Because the decision is so important, no one likes to think that they chose the “wrong” path. Consequently, there are very few rational conversations to be had when it comes to home ownership. Like most issues that cut to the core of our identity, we usually choose our side, and then selectively look for arguments or data to support the decision we made.
I’ve been on both sides of the home ownership debate and the only thing that I can decisively say is that for some people owning a home makes sense: but for many others it simply does not.
Hey, if you are 80%+ sure that you’re going to be rooted in the same area for 10+ years, and you derive a lot of enjoyment out of handyperson fixes/renos, then the benefits of home ownership might make it the perfect choice for you.
That said, judging by all the “buy at all costs” talk I continue to hear from coast-to-coast, I think we really need to examine the bigger picture when it comes to home ownership.
2026 Update: Very little has changed since 2021 that has led me to change my thinking on rent vs buy. You can see in the comments below that it hit a major pain point for a lot of folks (as I predicted it would). While rent and housing prices remain fairly stagnant in most markets since 2021 (and have actually decreased relative to general inflation).
At the end of 2020, the S&P 500 was at USD$3,756 and the TSX 60 was at CAD$1,034. As of writing this update they are at $7,126 and $1,996 respectively. Good for a stock market gain of 90% and 93% respectively. Once you factor in that the S&P 500 would have spun off a dividend of a little less than 2%, and the TSX 60 would have rewarded you with 3%, the case for stocks gets even stronger.
Now, who knows, the next five years could look much different, but I’m going to take a victory lap on this controversial article for the time being!
Kyle Prevost is a financial educator, author and speaker. When he’s not on a basketball court or in a boxing ring trying to recapture his youth, you can find him helping Canadians with their finances over at MillionDollarJourney.com, and the Canadian Financial Summit.The newly updated version of this blog appeared on MillionDollarJourney on April 24, 2026. It has been slightly edited and is republished on Findependence Hub with permission.
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