Dear David,

I relocated to Waterloo from the GTA at the start of the pandemic, and have been successfully working from home. My employer is now requiring employees to return to the office four days a week, and that is more commuting than I’m willing to take on. I’m considering selling my home and moving back to the city. I’m wondering whether I should purchase another home, or rent while I figure out where I want to be long term. What should I consider when deciding whether to buy or rent? – TOUGH CHOICES

DEAR TOUGH: The real estate market has been volatile over the past few years, but property values have still increased in many areas since the pandemic began in 2020. Depending on when and where you purchased, selling may leave you with more equity than you expect. 

The decision to sell, buy, or rent should be based on more than just the commute. People sometimes make major decisions without fully understanding their options, and during the pandemic, many believed working from home would last forever. Fast-forward a few years, and many employers are requiring staff to return to the office. This doesn’t mean you should accept a commute that makes you unhappy, but you should consider whether your employer’s policies are permanent, and if your employment situation could change again.

Look at the big financial picture. Ask a local Realtor to estimate the current market value of your home, and the likely proceeds after paying the mortgage, legal fees, real estate fees and moving expenses. Check out what it would cost to purchase a suitable property closer to work, where prices, property taxes and land transfer taxes may be considerably higher. Renting offers flexibility if you are unsure whether you want to remain with your current employer, or stay in the city long term. But rent can be expensive, availability may be limited, and you’ll no longer benefit from future increases in property values.

Is it possible to negotiate a different work arrangement, change your hours to avoid the worst traffic, or transfer to another office? Would taking the train or staying in the city a few nights a week make the commute manageable? Explore these options before uprooting your life.

PROTIP: There is no one answer to whether buying or renting is better. Consider whether your employment is stable, if their policies are permanent, and whether you can comfortably afford owning in the GTA. If the answers are yes, purchasing may make sense. If your employment, location or lifestyle plans remain uncertain, renting for a year may be the safer option. It’s important not to make a permanent housing decision based solely on workplace policy that may change again. Understand your equity, calculate the true cost of each option and consider where you want to live regardless of where you happen to work right now.

Keep in mind, buying and selling in the same market can have advantages. If you sell now and rent while prices are rising, the cost of buying back into the market at a later date will gradually erode your equity position. #Advice #AskDavid #TheNegotiator