For generations, Canadian homeownership has been considered a rite of passage and a cornerstone of financial security. But as the real estate market cools and borrowing costs remain stubbornly high, a growing number of Canadians are starting to question the logic. Is housing really an investment or just an expensive place to live?
That question recently exploded on Reddit’s r/RealEstateCanada, where a user launched a pointed critique of the country’s obsession with real estate. Their argument was simple: Just like a car or a washing machine, a house is something you use, and use wears things down. So why, they asked, should a 25-year-old house cost more than a new one, when it likely needs a new roof, updated windows and a kitchen reno?
For Redditor Robotstandards, Canada’s housing boom has been a 25-year fantasy, driven more by speculation than fundamentals. And now, with prices sliding and mortgages growing riskier, they believe the market is “catching up to reality,” with no soft landing in sight.
"We are now seeing a market correction and everyone is confused. The cost of a house should be cost of land + construction + government taxes and fees + inflation – depreciation costs (cost to bring house back to new condition). For the past 25 years the cost of a house has gone up exponentially and this makes absolutely no sense," they said.
"The market is now catching up to reality and I don’t think this is going to end well for anyone including the banks who mortgage these houses at 80% of ‘market value.’"
Are they right? Redditors weighed in.
A heated exchange
In response to the original post, the responses came fast and from both sides of the aisle.
One Redditor, u/HonestlyEphEw, argued that housing still holds its weight, not just as shelter, but as a practical financial tool. Once the mortgage is paid off, they wrote, your largest monthly expense disappears. Even mid-way through a mortgage, your payments are often lower than current market rent. “I can rent out two rooms and a basement and cover the entire mortgage,” they added. “That’s without even using the equity to buy a second property.”
But others weren’t buying it.
“Run the numbers,” countered u/Low_Disaster_7543. If someone with a $150,000 down payment and a $100,000 salary bought a home, they said, they’d be less wealthy in 30 years than someone who rented for $2,200 per month and invested the difference. It’s about opportunity cost, and the math, they claimed, doesn’t favour ownership.
U/Final_boss_1040 added a personal calculation: Their rent is $2,500 a month, but a comparable mortgage would be $4,200. That $1,700 monthly savings is money they can invest — an advantage that grows every year they stay out of the market.
Others weighed in with a more technical take. “The house itself is not the investment,” wrote u/darksoldierk. “It’s the land. It’s the appreciation. And it’s only an investment if your gains exceed the total cost of the mortgage, maintenance and taxes — adjusted for inflation.” Treating housing like a retirement plan, they warned, opens the door to all the risks and inequalities that come with financial speculation. When homes are treated as assets, affordability goes out the window.
That resonated with u/Trilobyte83, who chimed in that too many people forget about the opportunity cost of tying up hundreds of thousands in home equity. “With half your house paid off, that’s like $300,000 that could be in the market earning $2,500 a month.”
Still, others defended the long-term strength of real estate, especially in Canada’s major cities.
“Land is limited,” argued u/No_Soup_1180. “You can’t build homes in the middle of the boreal forest and expect people to move there. Toronto will never be Detroit.” They acknowledged that prices may fall in the short term but believe the long-term trend is always upward in desirable cities.
Peeling back the layers
So, who’s right?
Looking at the historical data, both sides have a point. Canada’s housing market has generated returns of about 3% to 4% annually over the long term — modest, but generally in line with inflation. That figure includes hot markets like Toronto and Vancouver, but also flat or declining areas where home values haven’t budged in decades.
Importantly, it’s not the house that gains value, it’s the land underneath. “The home depreciates; the land appreciates,” as one Redditor succinctly put it. That’s why crumbling bungalows in midtown Toronto still fetch millions: Location, not the building, is the asset.
But that asset is becoming harder to afford. Desjardins reports that housing affordability in Canada remains at one of its worst levels in 40 years, and isn’t expected to improve dramatically until well into the 2030s. A recent Reuters poll found that most economists expect only modest price growth over the next two years — between 1.2% and 3.3% annually— trailing inflation.
Even in the hottest markets, growth is slowing. Toronto, once a symbol of relentless price escalation, is now grappling with sluggish sales, a stagnant condo sector and rental markets so tight they’ve driven residents to join housing lotteries for a shot at a below-market lease.
At the same time, the supply gap continues to widen. CMHC estimates that Canada needs 3.5 million new homes by 2030 to restore balance, with most of that need concentrated in Ontario and British Columbia. Yet construction has failed to keep apace, hampered by labour shortages, zoning constraints and high material costs. Limited supply keeps land values elevated, but not necessarily affordable.
The real investment?
So, is a home still a smart investment?
It depends on timing, location, interest rates and individual goals.
For some, homeownership provides stability, pride and long-term cost control. Once the mortgage is gone, living costs drop dramatically. That’s value, even if it’s not reflected on a spreadsheet.
But from a pure return-on-investment perspective, housing isn’t guaranteed to outperform. Maintenance costs, property taxes and interest payments erode returns, especially in a market where prices are no longer rising at double digits each year.
On the other hand, investing the same funds in the stock market has historically delivered stronger long-term gains, albeit with more volatility and less tangible reward. And unlike a home, you can’t live in your portfolio when things go south.
The verdict
Reddit may not offer financial advice, but it does reflect the tension many Canadians feel. Housing is no longer a guaranteed wealth-builder. It’s a shelter, a forced savings vehicle and a bet on location. But it’s also a liability, subject to market whims, policy shifts and economic cycles.
For those buying today, the key is to know why you’re buying. If you need a stable place to live, plan to stay long-term and can manage the costs, homeownership can still be worthwhile. But if you’re buying with the expectation of quick profits, you may be chasing a dream that’s already behind us.
Housing may still be an investment, but in 2025, it’s no longer a sure thing.
Sources
1. Reddit: r/RealEstateCanada: Is housing really an investment? (June 2025)
2. Desjardins: Desjardins Affordability Index: Finding Shelter from the Trade War Storm (May 14, 2025)
3. Reuters: Canada home prices to lag inflation; trade war further hurts sentiment: Reuters poll (March 28, 2025)
4. CMHC: Housing shortages in Canada: Updating how much housing we need by 2030 (September 13, 2023)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
