Three reasons why I want to buy a house (and reasons why I won’t)

1951 ... Farnsworth HouseSettling down/making it your own

I don’t give two hoots about decorating, but I would dearly love to settle in with permanent furniture, appliances, and most of all, insulation. Sadly, this is the exception rather than the norm in NZ houses. I’d be happy to pay to insulate my own home, but not while renting. In the meantime, we suffer on…

T also wants a dog something chronic. I’m not an animal person AT ALL, so renting has been a good way to shut that down. But I’m willing to compromise when we have a place on our own, particularly if there’s any security benefit to be had (we’ve been burgled too many times).

Putting money into your own pocket

I don’t see property as an investment, nor do I believe rent is dead money. But given housing is our biggest expense, it sure would be nice to be funneling that into an asset of our own – and mortgage rates right now are reasonably low, with home loans in the 5% bracket.

I don’t want to be renting when we have a family

Kids are in the 5-10 year plan. Still a while away, but wouldn’t you want to enjoy your first house for a while before they arrive? And with us getting married this year, this is only intensified. I always thought I’d get married closer to 30 and we’d be in a position to buy a house straight after, but things won’t be happening that way.

Alas, buying a house is not on the cards right now. Why not? Let me count the ways…

The moolah factor

Houses in Auckland are pricey. (For New Zealand as a whole, the median household income is just shy of $80,000 and the median house price is $389,000 – in Auckland, that would be barely entry level. Affordability as judged by the house-price-to-income ratio is nearly 5x, more so for Auckland average house prices – over $600,000 for the city area and $450,000 for the western suburbs, where we’d probably be forced out to.) We definitely don’t have anywhere near enough for a down payment yet. And let’s not get started on property rates, or the fact that we would have to buy a house further out, forcing us to get a second car. $$$$$$ all over the show. It’s a huge financial undertaking we’re just not equipped to make right now.

Flexibility is key right now

We might want to move away for a while or go travelling. T is still figuring out a career. Basically, it’s still too early to settle down and commit to a mortgage.

How stable are our jobs anyway?

T is an hourly worker and his income often varies. And working in publishing, I can’t say I’ll ever really feel secure in my job.

What, if anything, is holding you back from buying a place? Or if you own your own house, how did you know it was time?

11 thoughts on “Three reasons why I want to buy a house (and reasons why I won’t)

  • Reply Mochi and Macarons January 29, 2013 at 04:01

    I’ve always thought that if I wanted to buy a place to live in, it’d have to be a permanent situation/decision (like in retirement), and I’d want to pay for the bulk of it in cash without any debt. By bulk, I mean 100%, which is completely doable if I have a million or two saved by the time I go to retire in some cheap country somewhere. 🙂

    I do dream about having a place where I can settle in and not move, but my reasons are a lot like yours, although with the possibility of kids looming on the horizon as I am nearing my 30s, I would like to settle in and at least rent a place for a year or more.

  • Reply Linda January 29, 2013 at 04:30

    My (now ex) husband and I moved from an apartment to a condo because he thought it would be better financially to be in something we owned. You know, the old story of “build equity instead of paying rent, blah, blah, blah.” If I was going to be in property we owned, I wanted a house with a yard, but that wasn’t something we could afford at the time. I told him I only wanted to stay there a maximum of three years, and so when we reached year three I said it was time to look for a house. That’s the house I’m in now, 11 years later (even if the marriage didn’t last).

    I love having a yard to garden in, but keeping up a house costs quite a bit. And as you note, the flexibility to move is a plus of renting.

    Incidentally, my older home doesn’t have insulation in the walls either, and I live in Chicago where it gets quite cold in winter and quite warm in summer. Unfortunately, older homes here usually don’t have insulation and the only way to add it is to rip out all the interior walls and make the rooms smaller, too. Much of the housing in the city falls into this category, too.

  • Reply Jane January 29, 2013 at 04:30

    We got booted out of our free rental house, so we used the money we’d saved living there to buy our own place. We were very lucky. The rental market where we live is extremely saturated, and you pay almost as much (if not more) to live in a nice apartment as you would to live a little further out in a house. Centrally-located housing is very expensive, whether you rent or buy.

    Although there are more expenses associated with homeownership, I do love being a homeowner. Even things as simple as reorganizing the cupboards feels nice; I think of it as benefiting us for years to come, rather than months. I don’t see the house as an investment, though, any more than I think of rent as “throwing money down the drain.” We had the money to buy a house, and we didn’t need the flexibility of renting, so we bought a house.

  • Reply Pauline January 29, 2013 at 06:59

    I have bought a rental property and have the money benefits without the need to live in the property, I can rent my own place with the rent money. So far it was the best of both worlds, but now I bought the house in Guatemala and that is quite neat to have your own place.
    Btw in the UK my utility company offered free insulation, could you check that with yours? From what I understand they get taxed by the government if they don’t improve energy efficiency in houses.

    • Reply eemusings January 30, 2013 at 11:27

      Nope, insulation subsidies are for the property owners (can’t expect anything from the slum lords that dominate NZ). Can’t wait till we have our own place. Free insulation? Sounds like a dream.

  • Reply krantcents January 29, 2013 at 13:47

    You should wait until you are ready. I have some friends who are professional comedians. As you know entertainment is not very secure even for the best. They bought their house and paid it off as soon as possible so they would always have a place to live at the lowest cost.

  • Reply Budget & the Beach January 29, 2013 at 17:15

    Well I live in LA…so enough said. 🙂 I probably would if I lived in a way more affordable part of the country. And who knows, maybe I’ll find a reason to move someday. At least I don’t feel so alone here. Most of my friends (even 30’s and 40’s) don’t own homes in LA.

  • Reply Brian January 30, 2013 at 03:55

    In our market, I never really felt like buying was that big of a commitment. With the condo we bought and the rental market in the city, there is never a reason for it to be empty. We haven’t lived there in over 2 years and bought it purely for the fact that we would build equity and the risk of devaluation is low. Now that we also own a second condo that we live in, I feel more settled, but still wouldn’t hesitate to pack up and travel. Is all about getting in the market for us!

  • Reply Amanda January 30, 2013 at 12:10

    I don’t think there’s ever a right time to buy a house…something will ALWAYS come up. By all measures, I bought my apartment at a good time – the market was down so prices were as low as they were going to get. I had a secure job and a good income by normal standards.

    But life changes. I moved to Sydney for a new work opportunity and rented out my apartment – but had difficulty finding tenants, then structural issues with the building meant that the apartment has been empty for the past six months as repairs are undertaken. It has absolutely destroyed any semblance of financial security that I once had – and none of it could have been predicted in March 2010 when I bought the place.

    I think most times, you really just have to bite the bullet and take a chance. Things will go wrong down the track, but if it works FOR NOW, that’s all you can plan for.

  • Reply Mrs. Pop @ Planting Our Pennies January 30, 2013 at 13:31

    For us, we knew we were going to be in the area and be together a while, and then prices dropped like a rock. And that pushed us over the edge into home ownership and landlording.

    Have prices in Aukland always been this high compared to income, or is there a housing shortage? If neither of those is true, then this may be a bit of a bubble waiting to pop that you’re just as well sitting out of.

    • Reply eemusings January 30, 2013 at 13:34

      Not always this unaffordable, but the ratio has been high for a long time (prices fell a little during the recession but have more than rebounded). And yes, there is a dire housing shortage. (Also, the property market is probably quite unique here – apartment and terrace housing is not the norm and harder to shift, plus we had a terrible leaky building phase with new construction.)

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