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Good to consider. But also worth understanding the role that paying a bank interest has in defusing the "rent money is dead money" myth. Many property markets a
by ddri 6y ago
Good to consider. But also worth understanding the role that paying a bank interest has in defusing the "rent money is dead money" myth. Many property markets around the world are in a bubble, again, and inversely have competitive rentals, especially after the pandemic. Owning a home, with a mortgage, incurs often far more impact from the interest to the bank than if one simply rented. Let alone maintenance, rates, etc, let alone the illiquidity. I'd rather not have a house in Lisbon as a non-national when the nation hits another crisis.
Not to challenge the great point you make about CoL, but there's so much cultural distortion around home ownership that it's almost a parody of fundamental economics.
- malandrew 6y ago> Many property markets around the world are in a bubble it's only a bubble if it pops. > there's so much cultural distortion around home ownership that it's almost a parody of fundamental economic Again, it's only a distortion if it doesn't persist for so long to become a persistent ground truth. A house is not a house is not a house because location, location, location. You can put the same exact dwelling structure in two different places and they can have two very different values because everything around the house matters too and if those things persist, they become as real as the house.
- andresp 6y agoAh so you expect housing prices to continue to grow above income forever? Maybe in the future a single house can cost more than the entire country's GDP or something like that right? House prices only go up!
- rorykoehler 6y agoIt's not impossible. If you live off your income then you've already been excluded from purchasing a house. This is what happens when wealth inequality becomes very extreme.