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John MacDonald: Is home ownership really worth the stress?

John MacDonald,
Publish Date
Thu, 24 Feb 2022, 1:08PM
(Photo / File)
(Photo / File)

John MacDonald: Is home ownership really worth the stress?

John MacDonald,
Publish Date
Thu, 24 Feb 2022, 1:08PM

I’m really starting to wonder why we get so caught up and obsessed with the idea of owning a home. 

I do know why and I’ll get to that shortly. But is it really worth all the stress? Really? 

All this talk about mortgage interest rates going through the roof after the Reserve Bank started lifting the Official Cash Rate yesterday is one thing. 

There are rates, maintenance, insurance - all expenses. 

Plus, we’re hearing today from Countdown supermarkets that they’re expecting grocery prices to keep increasing on the back of the grocery shop getting more and more expensive over the last couple of years. 

Not to mention pretty much everything else is getting more expensive too. Because you don’t get just under 6 percent inflation for nothing. 

And so, mortgage rates are joining the list of things making life more of a struggle for many New Zealanders. 

Some of us are at breaking point. And there is evidence out there to prove it. 

Last night, one of the teenagers needed picking-up from somewhere, and on the way home we went past a place that had a “Mortgagee Sale” sign outside. 

He was interested in that and asked me what it exactly meant, and we talked about this sort of thing happening when someone has a house or a property and, for whatever reason, they can’t keep up with the mortgage payments and so the bank comes in and sells it to get its money back. 

“That must be so embarrassing for that person,” the teenager said about the place we went past. But he also wondered what it meant for the people being forced to sell by the bank and where they might live once it’s all done and dusted. 

And I said to him that I think we’re going to see more of this happening this year. Because interest rates are on the up and a lot of people will have mortgaged themselves to the hilt buying places at exorbitant prices. 

A lot of these people too will have had fixed interest rates which will be coming up for renewal this year - and there are truckloads of people in this situation, apparently - which will mean quite a hike in mortgage payments and some of them just won’t be able to afford it. 

And so our conversation in the car last night raised as many questions as answers. And one of those questions for me was ‘why do we still think that owning a place is the be-all-and-end all?’. 

Is it worth all the stress? 

The alternative to owning your own home, of course, is renting. But you ask any renter if they think they’ve got it easy and most will probably tell you they feel ripped off by stupid rental prices and wish they owned their own place. 

So the grass doesn’t seem to be greener on any side of the fence does it? 

But we do have to ask ourselves whether the so-called “quarter acre dream” is over and whether it’s time to stop chaining ourselves to mortgages and banks for most of our lives. 

I said earlier that I know why those of us who are lucky enough to be able to, do get caught up in this idea of owning our own home. The simple reason is, it’s pretty much the only way to build personal wealth. Particularly if you’re a wage or salary earner. 

But here’s my question for you today. Is it all worth it? Is the stress over interest rates worth it? Is the cost of maintenance and rates worth it? 

Will the people with the mortgagee sale sign outside their place be thinking it’s worth it? Because they’re not just giving up on the quarter acre dream. The quarter-acre dream is being ripped away from them by the bank. 

And then there’ll be people who aren’t being forced to sell by the bank but have bought a place thinking they’ll do it up - another great kiwi tradition - who will be starting to realise that the value of their place is probably about to go down with overall prices dropping and the cost of borrowing is about to go up. They won’t be able to do any renovations because the bank won’t extend their mortgage and any renovations would just be over-capitalising. 

But, despite all of this, we somehow still think owning a home is the be-all-and-end-all. 

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