Should we buy a house?

[DebbieL]

We were trying to be financially responsible for the past 4 years by paying off our debt and saving (aggressively) for a 25% downpayment on a house. However in the maintime the price of houses has risen more than what we saved (it is like we did nothing). Actually we can afford less of a house that we could 4 years ago!!!

The market is going up, up, up and show no sign of decline (we are living in Montreal, Canada). We lost a lot of money in the US housing debacle. We are currently renting but this solution is no longer practical for us and we have to move (the sonner the better). We are scared to death and have no idea what to do. Price increase has been roughly 12% a year and is expected to flatten to 4% this year (estimate vary though no one seem to have a clue).

The Canadian housing bubble has been allowed to get FAR worse than the USA one ever did. I'm here in Canada in a very bubbly city too. Buying real estate up here in Canada before things burst will be the dumbest move you'll ever make. We are due to correct - try to be patient. The prices are unsustainable. You saw what happened in the States, and their situation was never allowed to get as out of touch with reality as ours has.

PS - good website on the Canadian real estate disaster is: Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate

[LivingAlmostLarge]

Rent something nicer. I would do that if you are sure the bubble will burst. In-laws here from canada and they don't think so because prices stagnated pretty badly in 80s and 90s. They bough in 72. Anyway though we live in a place with just as high housing prices, go south a few hours, and it sucks. We bought a townhouse for what you are looking for in homes. Mind you we can't find a home for $600k within 1 hour commute. Friends just bought for $600k a home 1+ hour out. So if we were willing it might be possible. Next to us? Friends bought a house for $1.4 million. Others bought for $575k but again 1+ commute. So what to do? Keep working and saving and hope to afford maybe $750k eventually but buying and paying it down instead of renting made the most sense. And $750k will buy us a 3/1 bath cape that is 100+ years old maybe.