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I hate that we lost sight of what wealth really is and replaced it with the idea of profit. I bought my house to provide myself with financial security, not profit.
My monthly "rent" (mortgage payment) is locked in for the next 25 years and will not go up. At the end of those 25 years when I'm ready to retire, I'll have housing with only taxes and insurance payments. THAT is wealth. THAT is what home ownership is meant to be. If housing prices fall, it won't change my life a bit.
That's why I bought a house instead of renting. One day it will be paid off, and from that on, as long as I keep paying the property tax nobody can kick me out. They can cut my water and electrcity, but the house and the plot remains mine.
Additionally, if overall house prices go up that does mean that your house becomes more valuable.
However, it also means all other houses become more expensive.
So in practice, if you want to move in 10-20 years for whatever reason, it essentially means nothing that your house has gone up in value. All that extra money is going to go to another house which has equally gone up in value.
The value of a house going up means you are technically building wealth, but that wealth is entirely tied up in the house itself. Unless you are intending to become homeless it likely will stay tied up in your house forever.
House prices going up is mostly a good thing for investors. Not so much for people who simply want a place to live.
Except that many people live in their homes until they need assisted living. In which case selling the home nets them more money than they put in to pay for those services. Or consider that home prices raise at different rates in different areas so it’s possible to sell in a hot market and retire to a cheaper area when you no longer benefit from things like proximity great schools as your children are grown.
Man I wish we could get 25 year fixed rate terms in NZ. Longest anyone would quote me is 5.