On things they make us think that are for everybody but they are not: Home owenership

Hobbes, I believe there is a misconception in Western societies. I guess that is my generation’s (early 30s, and working on a nice curvy stomach) fault.

We grew up on an ever growing GDP world. We grew to believe as rights thinks that older generations couldn’t even think of having one day. Over the years, I have had several discussions with my mother in regards of home ownership.

Her argument: We don’t only want the house, but also the fixtures, the nice living room, the white goods, the holidays and the beautiful car park on the driveway.

My rebuttle: The salary-to-home-price ratio is massive nowadays in comparison even after throwing in two salaries at the end of the month.

I guess mothers are mothers, and she always half-agrees with me, but still thinks we are all think we deserve more than we do.

Governments like the US, UK and Spain have been encouraging people to buy they homes for years (mortgage slavery) for years, but maybe that’s exactly at the heart of the current financial crisis. In other countries like Germany and France it is more common to rent.

Not owning a property has almost become a stigma, you are not part of the community, a citizen, unless you own (the bank owns) your roof. Well, a healthy and professional landlord base coupled with a property law that is fair and supports equally both sides of a tenancy agreement, I don’t see why property ownership should be a must (even though I am religiously paying my dues to the bank every month).

Home ownership restricts severely job relocation amongst other issues. National migration in Spain is null, in has always been, but in countries with populations more prone to move where opportunity is, a falling property market plus a home owner don’t make a good cocktail.

I think I read at Fool.co.uk that almost 80% of UK mortgages signed in the last 4 years were interest-only mortgages, but that also includes property buyers (investors) not home buyers (you can buy a house, but you make a home). In essence, in a falling market market, an interest-only mortgage might not be as good an idea comparing with renting (who saves on the side to pay the original amount? who isn’t or wasn’t expecting to pay the balance after 25 years of growing property prices?), but surely, in the long run, if you can afford it, home ownership is the name of the game. If you can afford it, and that’s for you to tell.

.calvin

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